— Kyle Davis, Sales & Leasing Agent, Commercial Properties Inc., a CORFAC International Firm — A market cooldown is likely in 2023 as interest rates rise and the investor pool becomes more cautious to some degree. I believe many investors recall lessons from the Great Recession and are not as significantly overleveraged, which means the effects of this market correction may not be nearly as drastic. Phoenix’s retail market also has some bright spots. The area’s retail net absorption was positive at more than 1.5 million square feet, with vacancy rates down to 5.1 percent at the end of the fourth quarter of 2022. This is compared to the 1,071,783 square feet of absorption and 6.6 percent vacancy rate a year ago. Many look at factors like unemployment, interest rates, housing starts, etc., to speculate about the coming market. What will impact our industry most directly, however, is how the lending market reacts to these indicators. As with 2008 and 2020, creditors may look at the same data points as investors and lower their risk profiles significantly faster than investors are able to counteract. There will be many commercial property loans set for refinancing in the near or upcoming future, as commercial property …
