Velocity Retail Group was invited to present on the retail panel during AZRE magazine’s recent Fall Forum. The panel was moderated by Pete Bolton, of the Pete Bolton Company, and included Dave Cheatham from Velocity Retail Group, Bob Mulhern from Colliers International, and John Carlson of Mark-Taylor Residential.
The panel was asked to discuss recent reports about retail being affected by malls with high vacancy, big box vacancy, internet shopping and Amazon. Cheatham commented that regional malls total a very small percentage of the total retail base in Phoenix and that this product type along with big boxes is not really a huge negative factor in our market. While some of the traditional retailers, such as JC Penney, Macy’s, K-Mart and Sears have experienced downturns in their business, most are working to evolve and keep pace in the omni-channel arena. Retailers always need to continually evolve and change to keep ahead of the changing customer.
Cheatham pointed out that with the vacancy rate of 9.3%, which is the lowest it has been since 2008, absorption continuing to increase, and healthy construction numbers, that the Phoenix retail market is poised for a strong market for the next 18 to 36 months. “The Phoenix market in general will experience continued interest from new retailers, restaurants and service providers during this next economic cycle. We are already seeing an uptick in national and regional companies expanding,” said Cheatham.
In addition to retail continuing on a rebound, the multi-family sector remains strong with an average of 4600 units being delivered each year. The Phoenix area is playing “catch up” with adding new housing units to the market. With continued in-migration of 2.5% – 3% each year, the area needs more housing to keep pace with demand.
The Forum also included updates on the industrial, office and investment markets as well as an in-depth discussion on the State of the State. You can read more about the details of each panel on AZRE’s website.