Retail vacancies drop a tenth of a percent in Phoenix
By Adam Lyons in : News // Jan 18 2011
The first tiny drop in retail vacancies has been reported finally, 42 months later. From 12.3 percent last quarter to 12.2 percent at the end of the 2010 year. As a year end comparison however, the Phoenix retail vacancy is still on the rise compared to 2009′s 11.4 percent. There are about 315,590 square feet in retail recent construction, last year about 757,511 was built in the same quarter. At the end of 2006 there where about 105 big box spaces available in the valley, today there are about 299 space.
Lease rates appear to be averaging down about $10 a foot compared to 2006 levels and about 7 percent higher in vacancy overall. The relationship between lease rate and vacancy is still unclear, a lower lease rate is clearly not the final answer in the Phoenix market, a strong economy and employment base will be. 2010 once again marks the second consecutive year in which the metropolitan Phoenix retail market experienced negative absorption. With companies like WinCo Foods completing transactions in 2010 of about 270k square feet, 2011′s numbers might show a third year in negative absorption unless more companies follow WinCo’s decision to make a presence in Arizona.
Good news: Phoenix is beating the national average on unemployment rate by nine tenths of a percent. Affordability is increasing, positioning Arizona in a way where businesses cannot ignore the opportunity in Arizona to operate.
ASU reports that the median single family home price has slightly improved in Q3 of 2010 compared to 2009, by $100. In addition, only 6,439 single family home permits where in issued in metropolitan Phoenix through November 2010 (according to R.L. Brown) which is less than permit issues in 2009 (8,027 permits) and close to half of the permits issued in 2008.
“Estimates are that it will be 2013 or early 2014 before all the damage that occurred during the recession is repaired,” the Phoenix CBRE Q4 report said. “However, the long-term forecast is for nation-leading growth to return to Arizona.”
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