Phoenix retail market report

Q4 2022

188.2 msf


Retail development in the Valley is rebounding following the lull experienced during the pandemic. Retail inventory (10,000 sf and up) totaled 4,742 buildings and accounted for 188,279,444 sf in the greater Phoenix area to end 2022.

Deliveries checked in at 1,311,398 sf for 2022 – a 35.2% increase over total square feet delivered in 2021. 

4.6 msf

Net absorption

The increase seen in retail’s net absorption over the past two years is a positive sign that the Valley is recovering following setbacks experienced during Covid. Total net absorption was up in 2022 - posting a year-over-year increase of 2,224,948 sf (up 95.37%). This increase brought the retail market’s largest year of positive net absorption since 2007 – with 2022 ending the year with 4,557,850 sf of positive absorption.

1.3 msf

Development activity

Retail development activity in Phoenix has increased by 35.2% since 2021 – bringing total deliveries to 1,311,398 sf in 2022, giving a total of 6,148,090 msf delivered to the market over the past five years. Retail development activity looks to increase further in 2023, with 1,530,040 sf currently under construction.


Vacancy rate

Vacancy for Phoenix retail continued its downward trend across all Phoenix markets in 2022, coming in at 5.7% to end Q4.

The decline in vacancies has been largely fueled by rising tenant demand post-pandemic - with grocery stores and fitness centers making a resurgence by leasing larger vacant spaces in shopping centers and new mixed-use developments.

10.9 msf


Total availabilities are down by 3,344,984 sf (23.41%) year-over-year – ending Q4 with 10,941,007 sf of total available space. This marks the least amount of available retail space in the Valley since 2007. Availability continues to decrease as tenants rush to secure space that was previously vacated due to Covid.


Investment sales volume

Investors and tenants capitalized on investment opportunities in 2022 - with investment sales volume increasing upon the record-breaking year seen in 2021. Total sales volume increased from $2B in 2021 to $2.2B in 2022 – an 8.7% increase year-over-year.

Phoenix’s retail market also witnessed the price per square foot increase by $33 psf (18.5% increase), during the same time period.

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