A Rise in Noteworthy New Retail Development in Arizona? Sprouts & Fry’s Marketplace Anchored Centers coming soon in the Valley.
Back on August 28th, 2013 I wrote a blog piece titled, “Will we start to see retail development again soon?”. As a follow up to that piece I want to discuss the past couple quarters, but more importantly, talk a bit about where we’re headed in the quarters to come. Citing improving leasing fundamentals – growing population, strengthening job market in AZ, net positive absorption/lower vacancy, solid residential rebound and rising rental rates – I concluded that we would soon see retail development. I’m happy to report that we are in fact seeing a rise in noteworthy retail development projects. Despite stagnant absorption in the 1st Q of 2014, and a precipitous residential slow down, rental rates continue to slowly rise and leasing incentives are all but gone in today’s retail rental market. These indicators point to a healthy landscape for new retail development, but does the development community agree? Are tenants ready, willing and able to absorb ground up space at ground up rents? Are they ready to invest the tenant improvement capital required to open new stores? The answer so far: Yes.
Below is a list of ground up retail projects to monitor with notes on the details and progress of each development:
- Silverstone, NEC Scottsdale Road and Pinnacle Peak Road: Sprouts Anchored shopping center in North Scottsdale. Strong rents and tenant demand for Sprouts first North Scottsdale location.
- Artesian Fiesta, SWC Gilbert and Ocotillo: Fry’s anchored shopping center, though Fry’s is not yet 100% secured.
- NWC Signal Butte and Guadalupe: Fry’s Marketplace anchored shopping center. +/- 125,000 sf with pads and retail shops.
- SEC Ellsworth Loop Road and Rittenhouse Road: Sprouts anchored center. Though the deal is not yet finished, this will most likely be a Sprouts Anchored Shopping center that will be well positioned across the street from Vestar’s Queen Creek Marketplace and brand new Harkins Movie Theater now under construction.
- Sun Dome Crossing, NEC RH Johnson Blvd and Camino Del Sol, Sun City West: Fry’s anchored shopping center. Nearly 100% pre-leased, only one 1,200 sf shops vacancy remains.
This Part Deux blog post seems like puppy dogs, ice cream and rainbows are on the retail horizon, but there are storm clouds too. Arizona’s housing market is slowing down to a crawl and that will have a negative impact on its commercial environment. Let us hope that we can continue to attract new businesses and create new jobs so that Arizona can continue its strong economic rebound.
Thanks for reading!
James DeCremer | Senior Vice President
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