Three Reasons Retail Is Dominating Phoenix
The retail market is flourishing in the greater Phoenix area despite being a troublesome asset class in other cities. RED Development managing partner Michael Ebert tells us why.
1. Residential Boom Buoys Retail
With new multifamily housing developments in and around Downtown Phoenix, and in fact throughout the Phoenix area, the region's density is increasing, Michael notes. "That, combined with the limited amount of recent retail construction, has allowed for the opportunity for existing retail properties to thrive more than ever." Recently RED and BIG Shopping Centers USA, acting in a JV called BIG RED Portfolio, acquired five shopping centers in greater Phoenix and the Midwest totaling 1.5M SF (previously RED had owned most of the properties in a JV with VEREIT).
2. Growing Restaurant Scene
Like in many growing areas, the restaurant scene is becoming more sophisticated in Phoenix. "Restaurants are excellent traffic drivers for shopping destinations and a complement to retail, so it’s great to see the interplay between the two and the positive impact restaurants are having on retail right now.” The three Phoenix-area properties are within a one-mile radius in Chandler: the 494k SF Chandler Festival (pictured), the 296k SF Chandler Village and the 261k SF Chandler Gateway. Restaurants are growing in the area, especially in Gilbert.
3. Cutting-Edge Retail Is Growing Here
Globally, it's an exciting and evolving time for retail, Michael says, as more stores are merging the physical and the digital, creating a seamless experience for consumers. "We're seeing a lot of that happening here in the Phoenix market," and consumers are responding positively. All of the assets the JV acquired are "well-positioned centers in solid growth markets," says Michael.