The Retail Market is Making a Comeback

I don’t normally disucuss the temperature of the Retail Market, but we live in an economic ecosytem where what happens in one part affects the other so we as Realtors and our clients should pay attention to what’s happening in other segmensts of the market. When the recession was in full swing, one of the markets that took the biggest hit was Phoenix. Residential and commercial real estate were overbuilt in the market, and the retail sector became a casualty. That’s all changing now, as retailers are starting to expand into the market. Retail real estate vacancy rates in Phoenix are currently around 10.5% and expected to fall below 10% by the end of the year. That’s a marked improvement from two years ago, when they were around 13.5%. Right now retailers that are already in the market are focusing on filling gaps within the core and backfilling vacancies left by former tenants in shopping centers. There isn’t a whole lot of new development, so space is tight. Retailers are cautiously looking in growth areas but are going to make sure that the customers are in place before committing. There are some concepts constructing new stores, though. Discount grocer WinCo Foods and Sprouts Farmers Market are two chains looking to build and expand. While there are some concerns about potential grocery store closings in the area due to the parent company of Albertsons acquiring Safeway, many of those closings could easily be backfilled by concepts like Planet Fitness and Blast Fitness, as well as furniture retailers such as, Ashley Furniture and Living Spaces. As long as the market stays affordable and there isn’t another overzealous building boom experts say the rebound should continue. Since our housing market has stabilized and everyone is cautiously optimistic the Retail Market has seen the same stabilization we have seen in the housing market in the last 18 months and that is good news for everyone.