A report from my city's planning department showed a huge drop in retail vacancy

I was looking at the quarterly commercial real estate report from the Phoenix planning office last month, and one number really jumped out. The retail vacancy rate in the central corridor dropped to 4.2%, which is the lowest it's been in over fifteen years. I had been hearing about how retail was dead everywhere, but the data for my specific area told a totally different story. It made me go back and look at the types of tenants filling those spaces, and it's mostly local service businesses like dentists, small gyms, and repair shops, not big national chains. That shift from big box to local service is a huge deal for property values and lease stability in those neighborhoods. I'm now using that city report as my starting point for any client looking at retail investment here. Has anyone else seen their local government data completely flip the script on a market trend they thought was true?

3 comments

3 Comments

spencermurphy2mo ago

Our town's main street has three new coffee shops this year.

henrybaker2mo ago

That's a lot of new competition in one spot. Gotta figure out what makes each one different or a couple won't last the winter. Seen it happen before with pizza places. Did any of them open in a spot that was empty for a while?

the_river13d ago

My buddy had a coffee shop that opened right across from a place that had been boarded up for like two years. Everyone thought it was a bad spot, but he said it was the only rent he could afford. Turns out people were so used to seeing that empty building that half of them thought his place was still closed too. Took him three months just to get folks to notice the lights were on. Kinda makes you wonder if that empty spot is a blessing or a curse.