The Phoenix Retail Outlook for 2013 – By Trent Rustan 

The 4^th Quarter of 2012 saw a much anticipated uptick in retail sales and leasing activity in Phoenix generating a decrease in overall retail vacancy rates. This momentum should continue into 2013 as we have now overcome the Presidential election, the Fiscal Cliff, and the Mayan calendar mystery that served as excuses for business expansions in 2011 and 2012 (provided that the stabilization and recent growth in employment continues).  

Retail businesses in Phoenix are continuing to strategically look for deals on property and seeking out the best values – and only striking deals that meet all of their expectations (generally by decreasing previously negotiated rental rates and/or improving their locations). This Phoenix retail activity is being generated by 3 primary groups: new local businesses started by formerly-employed individuals striking out on their own, existing businesses seeking to take advantage of current low rates to expand their locations, and national brands looking to fill holes in their market territories. 

One challenge to this continued retail growth in Phoenix will be that many of the better locations and spaces are being rapidly absorbed (leaving fewer desirable properties available), but the overall increase in retail activity should bode well for modest increases in general retail rental rates and occupancy rates. Phoenix property owners are cautioned against pushing too hard on rates and terms as this is generally still a “buyer’s market”.