Phoenix, AZ Retail Market Report Q3 2026

Vacancy Sits 292 bps Below the 2021 Peak; Rents Rise 4.5%

Demand

Phoenix absorbed 607K SF in Q3 2026, against 476K SF in the same quarter last year. Vacancy is 4.6%, 3 bps tighter than Q3 2025. NE Outlying Maricopa is the tightest submarket at 0.0% vacancy; Apache Junction leads rent growth at +5.5%. Trailing-12-month absorption of 3.12M SF is up from 1.87M SF a year earlier. Asking rent of $27.19/SF is up 4.5% year over year and a record. Vacancy sits 292 bps below the Q2 2021 peak of 7.5%.

Supply

Phoenix delivered 555K SF in Q3 and 3.29M SF over the trailing twelve months (+23% versus the prior TTM period). Space under construction equals 0.9% of inventory, concentrated in Buckeye at 5.7% of its stock. Annual deliveries peaked at 13.41M SF in 2007. The 2.32M SF pipeline equals about three quarters of absorption at the trailing pace.

Investment Market

Phoenix recorded $2.4B in sales over the trailing twelve months, -7% against the prior TTM period; Q3 accounted for $539M. The high-water mark in this series is $3.3B in 2021.

Phoenix cap rates average 6.64%, down for 8 straight quarters. Pricing sits at $280/SF, higher for 15 consecutive years. The cap rate is 38 bps below the Q1 2015 high of 7.02%. Price per SF is at a record.