Scottsdale Leads Phoenix Retail Activity

Phoenix has a healthy retail market, with activity surpassing national averages. Scottsdale and North Scottsdale is the most active retail submarket within the Phoenix area. New retailers in particular are flocking to the submarket for its stability.

“North Scottsdale and Scottsdale generally represent the most stable and hottest markets for retail, especially for new retail concepts entering our region that prefer an affluent local customer profile, “Matt Milinovich, principal at Avison Young in Phoenix, Arizona, tells GlobeSt.com.

The usual suspects are driving the activity. Fitness tenants, restaurants and entertainment uses are all leading the retail leasing activity in the market. “We are seeing a lot of activity from fitness tenants such as EOS Fitness, Planet Fitness, VASA Fitness, and small-group fitness categories seeking to occupy a variety of spaces with smaller requirements in shopping centers and larger users back filling big box spaces,” says Milinovich. “Restaurants are another center of activity, as landlords strive to make retail centers experientially attractive. Combining restaurants, fitness, and entertainment draws more consistent traffic and provides a neighborhood/community feel.”

The retailization of the healthcare market has also driven activity, and not only in Scottsdale, but throughout the Phoenix area. “There has also been a crossover among medical users, including doctors, dentists, chiropractors, optometrists, and physical therapy tenants wanting to move from medical office buildings to retail environments to be closer, and more visible, to their existing clients and potential new clients,” says Milinovich. “As consistent with the national trend, fashion is lagging, with major chain store closures in Q3.”

In addition to Scottsdale, Downtown Phoenix is also a top market for activity. “Downtown Phoenix near Arizona State University is a particularly active market for retail, especially restaurants. Also of note is the recent opening of Fry’s—a Kroger grocery concept—in a Downtown Phoenix mixed-use project,” says Milinovich. In addition, emerging markets like South Buckeye, West Maricopa, Deer Valley and South Mountain have some of the lowest vacancy rates in the area.