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PHOENIX – The city of Phoenix – one of the markets hardest hit by the national housing crisis – also ranks as the city with the greatest likelihood of experiencing a rise in distressed retail assets over the next few years, said a report in the Phoenix Business Journal.
According to a blog by Places magazine Vice President of Research Walter Bialas, Phoenix topped a list of deteriorating retail markets that also included Las Vegas, Kansas City, Atlanta and Birmingham, Ala., among the top five. New York City has the lowest score on the list, which ranked 63 metropolitan markets on the basis of several factors, including vacancy rates, new inventory in the pipeline and net absorption of such space, and pre-leasing activity.
Bialas added, however, that Phoenix has an economic engine that will come back. Although there seems to be no consensus among economists, he said he hopes to see some positive signs by late summer that will be the precursor of better times, according to the report.
Retail vacancies in the Phoenix area hit 9.3 percent in the fourth quarter, up from 6.4 percent the previous year, according to Places, a publication of Madison Marquette, a real estate investor, developer and operator.
Some Phoenix-area power centers have been especially hard hit by national retailer closings, including Circuit City, Mervyn’s, Shoe Pavilion and Linens ‘N Things. But new retail neighborhood centers on the fringes of the metro area may be carrying the worst stigma. Many of those centers were built based on the overheated housing market and when new subdivisions floundered, retail storefronts stayed empty and businesses failed quickly without nearby customers, said the Journal.
For convenience stores, the news is not as dire. Phoenix ranked near the top of the list of under-saturated markets for convenience stores last year, according to the 2008 CSNews Saturation Study. With 1,171 convenience stores serving a population of a little over 4 million, Phoenix scored a Saturation Index of 0.61, just missing the Top 10 of Under-saturated Markets in the Western U.S. Riverside-San Bernardino-Ontario, Calif., was No. 10 with an index of 0.57. The most over-saturated convenience store market in the Western U.S. was Flagstaff, Ariz., with an index of 1.77, as its 111 c-stores serviced a population of only 129,000.
(The full 2008 CSNews Saturation Study is currently available for sale at http://store.vnuemedia.com/digitalmall/store/product_view.jsp?product_id....)