— By Walt Brown Jr. of Diversified Partners —
Metro Phoenix continues to post strong retail market conditions, supported by expansion-ready corridors, dense and established trade areas, sustained population growth and retail sites positioned at major intersections with strong traffic counts. Even with shifting capital markets and more disciplined underwriting, retail remains one of the metro’s more consistent performers heading into 2026.
A defining constraint today is the limited availability of well-located, credit-tenant triple-net product for sale. This is particularly true in “A” locations within “A” trade areas. That scarcity is keeping competition elevated for stabilized assets and reinforcing pricing for deals that offer clean income, durable tenancy and long-term visibility.
At the same time, demand for credit-tenant, triple-net transactions remains strong across Arizona, with Metro Phoenix continuing to attract a meaningful share of that activity. A key driver has been capital migration and reinvestment from higher-cost Western markets, including owners selling assets in California and the Pacific Northwest and redeploying proceeds into Phoenix-area retail. For many buyers, the appeal is straightforward: growth, demographics and a business climate that supports continued tenant expansion.
On the development side, the market remains supply constrained at the top end of quality. Across the metro, demand for well-designed, well-located retail has continued to outpace the speed at which new product can be delivered, and some projects are trading prior to completion through structured pre-sales tied to completion guarantees. In practical terms, that reflects a buyer pool still willing to secure quality retail opportunities early when location, tenant profile and execution are strong.
National conditions are reinforcing that backdrop. Retail has continued to operate with historically tight vacancy in recent quarters, according to Cushman & Wakefield, while new construction remains comparatively limited relative to other property types, as tracked by CoStar. Those dynamics have supported landlord leverage in many markets and contributed to sustained investor interest in net-leased retail, particularly where tenant demand remains resilient.
For market participants, the takeaway is less about whether demand exists and more about where it is
concentrating. In Metro Phoenix, well-located credit-tenant retail continues to sit in the strongest position, while the limited availability of high-quality inventory is pushing more buyers toward developers and operators that can source opportunities, execute leasing and deliver stabilized outcomes in a competitive environment.
— By Walt Brown Jr., Founder, CEO and Designated Broker, Diversified Partners. This article was originally published in the January 2026 issue of Western Real Estate Business.