Colliers is reporting, the Greater Phoenix retail market is in expansion mode, but the pace is fairly slow. Net absorption has been positive in each of the past 14 quarters, but totaled just 383,000-square-feet in the first quarter.
Metro-wide vacancy is slowly on the decline. The rate ended the first quarter at 10.1 percent, 90 basis points lower than one year ago. The rate is expected to dip below 10 percent this year, after being in double digits for the past 25 quarters.
Shopping center sales activity slowed by 8 percent in the first quarter, and the median price retreated to $90 per square foot to start the year. Nearly half of all the shopping centers to sell in the first quarter had vacancy rates over 25 percent, which served as a drag on prices. Cap rates remained near earlier ranges around 7.5 percent.
Following a 35 percent rise in the median price per square foot from 2013 to 2014, prices retreated in the first quarter to $90 per square foot, 19 percent lower than the median price from last year. Part of the decline in prices can be attributed to the operating fundamentals at some of the properties that changed hands during the quarter; approximately 40 percent of buildings that have sold thus far in 2015 had vacancy rates of more than 25 percent.
For complete report see Colliers 1Q2015 Retail Report