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Retail Market Showing Signs of Slowdown

PHOENIX-The slowing economy has finally hit the retail market, where vacancy is up a full percentage point from last year at this time. The 6.1% rate comes with negative absorption in four of nine submarkets, according to Grubb & Ellis' latest Arizona report.

By D.J. Burrough | Updated on July 27, 2001

PHOENIX-The retail market in metropolitan Phoenix followed the office and industrial markets during the first half of the year, experiencing a downturn in leasing activity and increase in vacancy rates.

The Valley’s overall vacancy rate for retail space at the start of the second half of the year is 6.1%, up a full percentage point from the mid-year mark posted in 2000, according to a new survey by Grubb & Ellis Co.’s Phoenix office. “The amount of leasing activity in the metro Phoenix area slowed considerably during the first half of 2001,” says Donald D. Morrow, Grubb & Ellis’ regional managing director.

The Valley had just 934,000 sf of net absorption of retail space thus far this year, a considerable drop off from the activity experienced in the first half of 2000. According to the report, four of the nine submarkets experienced negative net absorption. The hardest hit was west Phoenix, which had negative net absorption of more than 250,000 sf.

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