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Glut of Grocery Space Could Ding Retail Market

PHOENIX-A sudden glut of grocery space coming onto the market could cause a historically low vacancy rate for retail space to go up slightly in the coming year.

By D.J. Burrough | Updated on December 27, 2000

PHOENIX-Retail space in the Phoenix metropolitan area should end the year with a vacancy rate at or below 5%, but that rate is sure to rise at least slightly in the coming year, with dozens of grocery store locations coming on the market.”This is a very interesting time in Phoenix for retail, because we will have so many large spaces on the market at one time,” Judi Butterworth, head of the retail marketing group at CB Richard Ellis told GlobeSt.com. “It is going to be a difficult project given the circumstances.”

Fleming Companies Inc. is selling off dozens of ABCO Foods locations throughout the Valley, and Kroger is expected to close a number of Fry’s Food stores in the coming year. Kroger completed its purchase of Smith’s, Smitty’s and Fry’s last year and plans to close duplication locations and smaller stores, which will result in large vacancies in about a dozen grocery-store-anchored retail centers in 2001.

“You are going to see a lot of unique ways to utilize older retail and some it won’t be retail when it gets done,” Butterworth says.

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