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Phoenix’s retail property vacancy rates have continued to decrease in all submarkets, with the overall rate dropping by 20 basis points from 5.3% in Q2 of 2023 to a record low of 5.1% in Q3 of the same year, according to Avison Young’s quarterly Phoenix Retail Market Report.

Since the pandemic, there has been a notable increase in tenant demand for grocery stores and fitness centers. These tenants are actively filling vacancies in malls and new mixed-use developments at higher rates than before the pandemic.

Despite uncertainty caused by interest rates and economic challenges, Phoenix’s retail leasing market remains strong with consistent growth,” stated James DeCremer, Principal at Avison Young – Phoenix.

In Q3 alone, there was positive net absorption of 373,525 square feet recorded for Phoenix retail properties – marking the twelfth consecutive quarter with positive absorption.

This latest report shows that post-pandemic recovery is well underway for Phoenix’s retail sector as it reaches its lowest ever vacancy rate.