Q4 2020 Retail Market
The Phoenix retail market fought a hard battle this year with multiple national companies announcing either bankruptcy or closures throughout the nation.
- Q4 ended with 64,036 SF of negative net absorption, but stayed positive over the entire year, ending at 215,692 SF
- Rental rates increased 0.68% YOY and 0.82% over-the-quarter, ending at $14.73
- Vacancy increased to 7.9%, up 20 bps from last quarter and up 60 bps YOY
- Airport Area submarket cluster ended the year with the lowest vacancy of 4.8%, but increased vacancy YOY by 90 bps
- West Valley submarket cluster delivered over 200,000 SF of new product this year
- West Valley had the largest decline in vacancy YOY, dropping 70 bps from 2019
- Over 1.1 million square feet of new retail inventory delivered in 2020
- Investment sales outperformed all three previous quarters, illustrating the traction the Phoenix market is gaining from investors
- The median price per square foot (over 10,000 SF and $1 million) increased 16.7% over-the-quarter and 12.1% over-the-year, ending at $199.35 PSF
- Q4 sales volume ended at $273 million, driving the year's total to $760 million
Vaccine progress will remain a dominant market narrative throughout 2021. As confidence grows, we will see a transition year, moving back to services from goods, and to in-person from virtual. The scars of 2020 will remain vivid from businesses that did not survive, but the market is in a great position to continue pushing forward.
In the midst of the COVID-19 outbreak, information and data is emerging at a quick and uneven rate. The information contained herein has been obtained from sources deemed reliable at the time the report was written. While every reasonable effort has been made to ensure its accuracy, we cannot guarantee it. No responsibility is assumed for any inaccuracies. Readers are encouraged to consult their professional advisors prior to acting on any of the material contained in this report.
