WESTERN SNAPSHOT, JANUARY 2010

Phoenix Retail Market

1. MARKET MOVES

Columbus, Ohio-based Glimcher Properties is developing the $270 million Scottsdale Quarter, a mixed-use, destination development that opened its first phase in March 2009, with Phase II scheduled to open this March. Located at the southeast corner of Scottsdale Road and the Greenway-Hayden Loop in the North Scottsdale submarket, the entire three-phase project totals nearly 1.25 million square feet and features retail, entertainment, residential/hotel and office components.

While many other new Phoenix-area developments have been put on hold or canceled altogether in this economy, Scottsdale Quarter’s development continues. Located across from Kierland, Glimcher’s major infill development is able to piggyback on the first successful lifestyle center on the West Coast. Currently, Scottsdale Quarter has attracted national tenants new to Arizona such as Williams-Sonoma Home, H&M, Brio Tuscan Grille, Oakville Grocery, and west-elm. Others tenants such as Gold Class Cinemas, Nike, and Sunglass Hut are coming soon. 

2. MARKET MEASURE

Retail players should be most focused on unemployment. Phoenix’s job growth is the number 1 statistic affecting our retail sector. While the housing and overall economic indicators may be showing some signs of life, recovery in all sectors is not possible without job growth, and in Phoenix job growth will be slow during the first quarter/half of 2010.

3. THE MARK OF A MARKET

The metropolitan Phoenix market differs from other western cities in terms of its affordability of housing, from first-time buyers to retirees. Phoenix is still very affordable as compared to markets in California and Las Vegas. As the market comes out of this recession, Phoenix is poised with available, affordable residential and commercial properties. Also, there still is plenty of land area in which to expand, unlike our counterparts who are bounded geographically from growth.

— Andrew Kroot is a principal at Velocity Retail Group LLC in Phoenix.

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