BRR’s Kelsey Sundet Leads Phoenix Retail Discussion

Key themes which emerged in the discussion:

• Population growth continues to fuel investment. Phoenix's sustained population growth creates an attractive environment for development. Companies view the market as a long-term investment on par with Dallas and New York. Developers target new retail sites by following that growth, tracking where homebuilders are actively building. The East Valley and Gilbert corridor holds steady while the West Valley, including Buckeye, emerges as a fast-growing area.
• Permitting and entitlement timelines remain a hurdle. Review cycles that once took two rounds now regularly stretch to four or five, turning processes that used to take three to six months into 18-months or longer.
• Tenant mix continues shifting toward experiences. Restaurants now make up roughly 35 percent of shop space, up from about 20 percent historically, with steady demand from grocery, fitness and entertainment tenants.
• Development strategies are splitting between acquisition and ground-up construction. With land and construction costs elevated, growth is increasingly coming through acquisition of existing centers, alongside continued new development, particularly grocery-anchored and build-to-suit projects.