2024 Retail Predictions: Western Retail Advisors

Nearing the end of a year fraught with myriad challenges to commercial real estate finance, investing, and development, industry experts offered their recaps of 2023 and predictions for 2024 without mincing words about the struggles and triumphs…

Overall Phoenix Retail Market
A surge of retailers is vying to plant a flag or expand their presence in Phoenix, reversing our long-held challenge of being over-retailed into one of simply finding space. A pipeline of more than 3 million square feet of new retail construction will help that supply-demand balance, but development takes time and has required those eyeing best-of-the-best locations to plan ahead— in some cases many years out. We’re working against 20-year low vacancy rates and all-time-high rental rates, but we’re finding solutions for today’s best-in-class and compelling retail users and its most innovative owners. As Phoenix grows at breakneck speed, this momentum will only accelerate. Our team works relentlessly to find the highest quality new locations while navigating high construction costs, rents, and capital scarcity. Still, with exponentially high demand, the future of retail in Phoenix is bright.

Eric Termansen
Founding Partner
Western Retail Advisors

Big Box
In 2023, well-located big box retail experienced some of the lowest vacancy rates in recent memory. Despite notable bankruptcies from Bed Bath & Beyond, David’s Bridal, and Party City, aggressive retailers looking to grow their market presence snapped up the lion’s share of those locations. In 2024, we expect to see this trend continue. With occupancy in Class A centers at all time highs, new developments that broke ground in 2023 will begin to come online in 2024. With construction costs still elevated, these new construction projects and low big box vacancies have put upward pressure on rents. To date, the retailers’ appetite for growth has been strong enough to absorb these higher rents. But if 2024 brings any pullback in consumer spending, we could see some retailers begin to slow their growth. That said, we think rapidly growing markets like Phoenix will continue to fare well compared to other U.S. metros.

Ryan Desmond
Western Retail Advisors

Capital Markets
In the investment sales market, we expect the existing surplus of retail listings to regress towards the mean as fewer new developments hit the market due to their inability to pencil. Existing listings will adjust to market pricing in order to transact. Overall deal volume will be below average based on historical standards as investors contend with high borrowing costs and the uncertainty of a presidential election. The current pace of deal volume and cap rate adjustments will continue until investors regain the ability to lever up when purchasing a property. While these headwinds are quite real, continued tenant demand and record low vacancy rates have investor sentiment as positive as it has been since before the ’08 crisis. Existing owners will be pleased with the performance of their shopping center investments and new investors will continue to be attracted to the strong fundamentals driving demand in the sector.

Andrew Lundahl
Managing Director
Western Retail Advisors

Tenant Representation
In the year ahead, the retail tenant representation market will continue to see demand for existing retail space as need outpaces supply. While this demand will come from all sides of the retail spectrum, only those at the forefront of consumer trends will likely have the capital resources needed to afford new construction. Undoubtedly, the retail users that continue to adapt to the changing demands of the customer—from a desire for experiential retail to clicks-and-bricks conveniences—will flourish. At the same time, those who don’t embrace change will struggle. But even for the excelling retailer, a prolonged elevated construction cost could limit their forecasted growth. Until construction prices stabilize or decrease, expectations from those across the retail sector must be tempered by a much higher cost of doing business.

Dave Uhles
Senior Vice President
Western Retail Advisors

Strip Centers
Metro Phoenix’s continued population growth and rapid addition of new residential communities has pushed retail strip center vacancy to an all-time low of just 4.5%. In the new year, we expect strip center vacancy to remain low and tenant demand to remain high. New construction will be challenged with high costs to build and finance and lengthy entitlement processes. Rental rates on new construction could significantly increase as a result. Well-positioned existing strip centers will also continue to see rent increases on market rate renewals and new leases. While the rising cost of build outs may increase concessions, higher rents will more than cover these considerations for owners. Landlord expectations on credit worthiness and operator experience will remain high, given such strong occupancy rates and their ability to upgrade tenancy.

Kalen Rickard
Senior Vice President
Western Retail Advisors

Overall, Arizona continues to be a strong market for restaurants and, in some cases, one of the better-performing markets in the country. As such, demand for restaurant space in 2024 should remain strong, especially among the groups that report to Wall Street. Independent and smaller multi-unit operators will likely be more cautious with their expansion in light of the current macroeconomic headwinds. However, those with access to capital will still look to grow. Amidst the positive performance, sourcing quality locations will remain challenging given scarce supply due to delayed timelines or an outright pause of new retail projects due to high construction costs and the current lending environment.

Charles Skaggs
Senior Vice President
Western Retail Advisors

Anchor Centers
While Phoenix retail has sometimes taken a backseat to other commercial real estate, such as office or industrial, the sector re-emerged in 2023 and will continue to shine in 2024. Anchored shopping centers, in particular, are the strongest, and their occupancy rates are the highest I’ve seen in my 25-year career. Undoubtedly, COVID forever changed how people shop, which could lead to more anchors closing in 2024. But our post-pandemic normal is also punctuated by a dramatic increase in traffic counts. This has retailers sitting on the sidelines, waiting for the opportunity to scoop up available space. This will place continued upward pressure on rents at anchor centers and keep vacancy rates at all-time lows, positioning Arizona as one of the strongest retail markets in the country. It’s a great time to own retail or be an investor in retail in this market.

Bryan Ledbetter
Senior Vice President
Western Retail Advisors

West Valley Retail: A Booming Market

by Bryan Ledbetter, Western Retail Advisors

With communities like Peoria, Surprise, Buckeye and Goodyear ranking among the fastest-growing cities in Arizona, the West Valley now boasts a population of approximately 1.7 million residents, booming employment opportunities along the Loop 303 and a retail market that has come into its own.

Retailers of all types are taking big steps to serve this very underserved trade area, bringing all levels of development online and causing national big-box tenants, entertainment destinations and even neighborhood retailers to compete for space. As one might expect, this has pushed vacancy rates to record lows in the 4% range and continues to elevate rental rates. High rents are particularly prevalent at the newest developments, which continue to bear the brunt of high construction costs.

Village at Prasada, which was developed by SimonCRE and is being leased by Western Retail Advisors, leads the new construction charge with one of the largest retail commercial projects west of the Mississippi. A 700,000-square-foot first phase is complete and fully leased to tenants that include Sprouts, Ross, HomeGoods, Marshalls, Ulta Beauty, Total Wine & More and PetSmart. A 350,000-square-foot second phase, called Prasada North, is under construction with negotiations underway for more than 95% of the project’s retail and restaurant space.

The success of Prasada has kicked off additional retail developments, all of which are projected to break ground in 2024 and complete in 2025. This includes Vestar and DMB’s 512,000-square-foot Verrado Marketplace, also leased by Western Retail Advisors. Buckeye Commons will total 411,000 square feet, with a Costco anchor. Vestar has also announced plans for the 375,000-square-foot Laveen Towne Center.

On the entertainment front, existing destinations such as the Westgate Entertainment District are thriving, welcoming tenants like PopStroke, Arizona’s first location for the Tiger Woods-backed golf concept. To the south, VIA Resort is under construction. When opened in 2024, the water-themed development will become Arizona’s largest hotel and entertainment destination. A new Top Golf is also now open just to the west, immediately across Loop 101.

To the north, and also fronting Loop 101, Agua Fria Plaza serves as a great example of the unbounded demand for West Valley neighborhood retail space. At this project, our firm has completed a string of leases to bring the property to 100% occupancy with tenants that include a newly remodeled Fry’s Food & Drug store, Nationwide Vision, UPS, Foothills Sports Medicine, Wingstop, Subway and McDonald’s.

Now a community where one can live, work and play in style, the West Valley’s story continues to evolve. Incomes, employment and residential opportunities are all expanding. As this transformation continues, there is little doubt that area residents will soon have all the hottest retail and restaurant offerings the Valley has to offer, right at their doorstep.

Bryan Ledbetter is senior vice president at Western Retail Advisors, a full-service commercial real estate brokerage firm specializing in the retail market that serves top retailers and Fortune 500 clients in more than 30 states nationwide.

Target among major tenants announced for Verrado Marketplace in Buckeye

11 new tenants are coming to Tempe Marketplace

Vestar, one of the leading privately held shopping center owners and managers in the western United States, announced 11 new tenants will join the dynamic roster of retailers at Tempe Marketplace, further elevating the shopping experience for residents and visitors alike. Totaling more than 54,000-square-feet of retail and restaurant space, the addition of these tenants brings the center to nearly 100% leased.

As the exclusive leasing brokers for Tempe Marketplace, Western Retail Advisors brokers Ryan Desmond, Charles Skaggs and Alberto Caballero represented Vestar in the new leases for Box Lunch, Escapology, Handel’s Ice Cream, J. Crew, Lululemon, LumberjAxes, Nike, Pandora Jewelry, Rowan Piercing and Strange Adventures Comics & Collectibles, and for the relocation and expansion of Hot Topic. Western Retail Advisors brokers Charles Skaggs and Noah Anastassatos also represented Handel’s in their lease negotiations.

Among the new retailers – Lululemon, Nike, LumberjAxes, Handel’s Ice Cream and Escapology have opened their doors in time for the upcoming holiday season. Highly anticipated brands including J. Crew, Rowan Piercing, Pandora Jewelry, Box Lunch, and Strange Adventures Comics & Collectibles will join Tempe Marketplace’s robust lineup of retailers in the coming months. Original Tempe Marketplace tenant Hot Topic is relocating to a new space within the property- nearly double the size- to meet the demands of the Tempe customer base. These household names bring a mix of fashion, fitness, and experiential retail to the center, enhancing the diverse offerings available to the Tempe community and beyond.

“We are excited to welcome a new wave of tenants to Tempe Marketplace. These additions underscore our commitment to offering an unparalleled shopping experience for the community,” said Taylor Alvey, Vice President of Leasing at Vestar.

Cutting-edge activewear and yoga-inspired apparel brand Lululemon, opened its doors on November 17th. Known for its innovative designs and high-quality materials, Lululemon will enhance the robust shopping options already available at Tempe Marketplace and will be conveniently located next door to Sephora. With a focus on functional and stylish activewear, Lululemon is a go-to destination for fitness enthusiasts and fashion-forward individuals alike.

Timeless American fashion brand, J. Crew will make its debut at Tempe Marketplace in the Spring 2024. Located near F21, the beloved brand known for its quality and sophisticated designs, will be another exciting addition for fashion-savvy shoppers.

Additionally, Vestar is excited to introduce Rowan Piercing, opening in early 2024 at Tempe Marketplace. Offering a personalized jewelry experience with hypoallergenic products and licensed nurses, Rowan Piercing will be located near Churro Nest and offer a wide selection of services.

Nike, a global leader in athletic footwear and apparel, joined the lineup of exceptional retailers at Tempe Marketplace this June. Located between H&M and Creations Boutique, the Nike store offers a wide range of athletic apparel and footwear for men, women, and kids.

LumberjAxes, the ultimate axe-throwing restaurant and sporting venue, also opened its doors at Tempe Marketplace this past summer near Victoria’s Secret. Spanning an impressive 13,000-square-feet, LumberjAxes offers a thrilling and immersive experience that combines axe throwing, cuisine, and a vibrant atmosphere.

Handel’s Homemade Ice Cream opened November 17th and now makes ice cream fresh every day at Tempe Marketplace, using only the finest ingredients.

Tempe Marketplace is looking forward to the opening of three other new retailers. Comic and collectible retailer Strange Adventures is currently under construction, along with Box Lunch, a community-oriented gift and apparel brand that donates a portion of each purchase to local food banks through their partnership with Feeding America®. Both are expected to open by the end of 2023, while Pandora Jewelry is scheduled to start construction in the Spring of 2024.

Existing retailer Hot Topic, a brand of music-related apparel and accessories is an original tenant of Tempe Marketplace, first opening in 2007, will relocate into a 3,000-square-feet space, set to open by the end of the year.

Tempe Marketplace remains dedicated to providing a curated selection of top-tier retailers as well as fostering an atmosphere that invites customers to gather and socialize.

For more information and updates on all that Tempe Marketplace has to offer, please visit https://tempemarketplace.com/ and for more information on Vestar, please visit www.vestar.com


*Lululemon is a go-to destination for fitness enthusiasts and fashion-forward individuals alike. (Photo courtesy of Vestar)

Dave’s Hot Chicken Brings the Heat to Phoenix

PHOENIX, Ariz., Nov. 15, 2023 – Dave’s Hot Chicken, a Nashville-style hot chicken restaurant from Southern California, is set to open its second location in Phoenix this week, and has plans to open several more in the coming months.

Dave’s Hot Chicken has gone from a scrappy, late-night pop-up to being the fastest growing restaurant chain in the nation. Come this Friday, November 17, Phoenix residents will be able to get their hands on the hot chicken so good, it made superstar Drake  want to invest.

Opening this Friday, the newest Dave’s Hot Chicken restaurant will be located at 475 E. Bell Rd., Suite 172, in the Target Shopping Center at the corner of Bell Road and 7th Street. It will be open seven days a week from 10 a.m. until 1 a.m.

The endcap restaurant – which features an outdoor patio, locally inspired street art and plenty of patron parking – will be owned and operated by franchisees and brothers Devon and Clinton Wesselink of Elevated Restaurant Group AZ.

“We are bringing even more heat to the desert with Dave’s Nashville hot chicken,” said Devon Wesselink. “This is our first Dave’s location in the city of Phoenix but we are actively seeking more location opportunities throughout the market, with a focus on expanding in the West Valley.”

Dave Uhles and Alberto Caballero of Western Retail Advisors represented Elevated Restaurant Group in the transaction.

“There’s a cool factor about the Dave’s Hot Chicken brand that has boosted its already rapid growth across the country and attracted celebrity investors,” said Caballero. “We are excited to continue to be a part of the brand’s expansion plans in Arizona and to capitalize on this state’s love of quick serve restaurant concepts.”

Dave’s Hot Chicken specializes in Hot Chicken Tenders and Sliders, along with sides of house-made Kale Slaw, creamy Mac n’ Cheese, crispy, seasoned French Fries, and Shakes. Offered at various spice levels ranging from No Spice to Reaper™ (which requires a signed waiver for those who dare), each piece of juicy, hand-breaded chicken is spiced-to-order.

“Our founders started Dave’s as a parking lot pop-up restaurant in Hollywood with a portable fryer and picnic tables from their backyards just six short years ago. We’re thrilled to be opening our second restaurant in Phoenix,” said Bill Phelps, Dave’s Hot Chicken’s CEO.

About Dave’s Hot Chicken
In a modern-day American dream story, three childhood friends, Chef Dave Kopushyan, Arman Oganesyan and Tommy Rubenyan, scraped together $900 in 2017 to launch Dave’s Hot Chicken in a parking lot, portable fryers and folding tables in tow. Dave’s Hot Chicken quickly took off, opening an East Hollywood brick-and-mortar restaurant shortly after, with support from Tommy’s brother, Gary. In 2019, the team struck a deal with Wetzel’s Pretzels co-founder and former CEO, Bill Phelps, and movie producer John Davis to begin franchising the Dave’s Hot Chicken concept throughout the U.S. and beyond.  The company has sold the rights to more than 700 franchise locations in the U.S., Middle East and Canada and will open 70-plus locations this year. Harkening back to an Eater LA blog that helped propel early interest in the brand, the company’s mission is to “blow their minds.” Additional brand investors include Billboard’s Artist of the Decade, Drake, former California First Lady Maria Shriver, actor Samuel L. Jackson, and Good Morning America anchor and retired NFL player Michael Strahan.



Eric Termansen
Founding Partner
Western Retail Advisors


Termansen’s career in commercial real estate spans more than three decades, the last 22 years of which he has served as the founding partner of Western Retail Advisors (WRA). Under Eric’s direction, WRA has grown to represent more than 175 tenants and over 90 landlords with 15 million square feet of consumer-focused real estate.


No. 1 on the commercial real estate bucket list:

“To see my team exceed what they think is possible. Many of our brokers joined our firm with limited brokerage experience or even as new to the industry. Creating a culture and infrastructure that allows people to build great lives for their families makes me want to be around for a long time to watch – and help – them achieve their goals.”

West Valley Retail Demand Brings Phoenix’s Agua Fria Plaza to 100% Leased

Western Retail Advisors completes 13 lease transactions since taking over retail listing

PEORIA, ARIZONA, September 27, 2023 – On behalf of institutional owner and investor Westwood Financial, Phoenix-based retail brokerage specialist Western Retail Advisors has completed a string of leases that bring the Agua Fria Plaza retail center in Phoenix’s West Valley to 100% leased.

The center, which is located at the southeast corner of 91st and Olive avenues in Peoria, sits directly along the Loop 101 Freeway, just north of State Farm Stadium, Desert Diamond Arena and the new VAI Resort, a water-themed development that – when opened in 2024 – will become Arizona’s largest hotel and entertainment destination.

Since securing the leasing assignment for Agua Fria Plaza, Western Retail Advisors Senior Vice President Bryan Ledbetter and partner Katie Weeks have completed 13 leases at the project totaling more than 20,000 square feet.


 “Tenants continue to have an almost unfettered demand for high-quality metro Phoenix retail space. Agua Fria Plaza particularly shines with its freeway adjacency and almost direct access to the West Valley’s booming sports, entertainment, resort and residential developments,” said Ledbetter. “Special thanks to David Mitroff and Lauren Ball at Westwood Financial for their institutional-level expertise and for creating an environment where great leases can happen quickly and successfully.”


According to CoStar, metro Phoenix’s retail vacancy rate has fallen to approximately 5% – a record low that is driven, in part, by booming population growth in the market’s West Valley suburbs.

Agua Fria Plaza is anchored by a newly remodeled Fry’s Food & Drug store. Other tenants include Nationwide Vision, UPS, Foothills Sports Medicine, Wingstop, Subway and McDonalds. A just-signed, five-year deal with Beauty Parlour Salon totaling 1,200 square feet brings the project to fully occupied.

Based in Los Angeles, Westwood Financial owns, manages and operates over 125 high-quality shopping centers in top metropolitan markets across the U.S. Western Retail Advisors leases eight properties for the company in the Phoenix area.

Surprise gets creative to lure IKEA, Swedish meatballs to West Valley


Audrey Jensen, Phoenix Business Journal

The city of Surprise is using an international holiday dedicated to meatballs to court one of the city’s top-requested retailers: IKEA.

“When we discovered there was a Swedish Meatball Day, we thought, ‘Let’s just have some fun,'” said Surprise’s economic development director, Jeanine Jerkovic.

The West Valley municipality, which has a population of more than 160,000, launched a campaign video this week highlighting the city’s love for the furniture store’s popular meatballs in addition to its other products.

IKEA was named as one of the top three retailers requested by more than 5,300 residents who completed a survey by the city this year. And with recent news that IKEA is on the hunt for 17 new locations in the U.S., Surprise decided to take a unique approach to capture the Swedish retailer’s attention.

“We looked across the spectrum of most-wanted retailers and that was one where, immediately we felt a lot of kindred spirit of creativity. We felt there was a real opportunity to be appealing to them and reach out in a very personal way,” Jerkovic said.

This is the second year in a row that IKEA has been voted as a top-requested retailer by Surprise residents. The furniture giant is already familiar with the Phoenix market — it has a store in Tempe and previously planned for another within the city of Glendale’s sports and entertainment district, though those plans were later scrapped.

In its “Surprise Loves IKEA” campaign video, the city touted its population growth and proclaimed Aug. 23 as Swedish Meatball Day.

Neil Board, a partner at Western Retail Advisors, didn’t rule out Surprise as a potential destination for IKEA. He noted that the West Valley overall has experienced a lot of retail growth including SimonCRE’s Village at Prasada and the planned Prasada North just east of the Loop 303, which at full build-out could see more than 1 million square feet of new retail and restaurant space.

“I think Surprise would be an obvious choice,” Board told the Business Journal. “There’s a lot of new families moving into the West Valley. The other retailers we represent — and are also the ones we’ve helped SimonCRE land at Prasada — they’re impressed with the median income, the job growth, the infrastructure, the highways, there’s nice communities being built.”

Board said an ideal location for a destination or regional retailer such as IKEA could be along a major highway or interstate. He said retailers are typically synergistic and will follow other successful retailers to areas like the West Valley.

One of the new retailers moving into the Prasada area includes a planned American Furniture Warehouse, but Jerkovic said there’s enough demand from residents for competition because of the housing growth in the city.

“Everything we’ve gotten in the market, because of our growth even when we get the retailer here and we get them to open, there’s a line out the door,” she said. “We’ve got this pent up demand for everything in Surprise.”

Other campaigns helped city land Costco in past

Jerkovic said the IKEA campaign is also a way for them to personalize and create name recognition for Surprise while slowly building a relationship with IKEA. So far, Jerkovic said they’ve only had initial outreach to IKEA with hopes to turn it into serious discussions in the future.

“We like to convey to retailers that we’re open for conversation, we’re friendly and we’re fun,” she said. “They should feel very welcome should they start looking at our market.”

The city successfully landed a new Costco store along the Loop 303 in the Prasada area after it spent years wishing the company a happy birthday.

“As the campaign escalated, that was I think the motivation behind one of the first phone calls we received from one of their decision makers,” Jerkovic said. “Even though it opened a door, it wasn’t a foregone conclusion. It really did take a lot of follow up and more conversations with our residents.”

Other cities in the West Valley such as Goodyear have also tried this approach with popular retailers such as Trader Joe’s. Goodyear last year held a happy birthday event for the grocer and in 2019 held a “We Want Trader Joe’s Day” with hundreds of residents.

“Communities want to find ways to stand out in the crowd of communities vying for the attention of desirable retailers, and sometimes this takes a creative spin,” said Wendy Bridges, Goodyear’s economic development director in a statement. “These efforts are ideally in alignment with the reality of where that business is in their expansion planning.”

Typically, the city of Surprise sends a personal video from the mayor, a phone call and certificate of congratulations to its top-requested retailers, but retailers like IKEA create a unique opportunity for this type of campaign, Jerkovic said.

“It’s an important way for us to convey this is an authentic campaign, it’s not something we made up or pulled from a stoic data analysis,” she said. “It’s a very different approach than what a lot of cities might take in reaching out to a retailer or restaurant.”

Surprise is poised to growth even further northwest with new master-planned communities, logistics hubs and commercial centers such as the planned HonorHealth hospital campus and retail center in Asante.

Originally published by the Phoenix Business Journal on August 25, 2023.

How downtown Phoenix compares to other cities for Covid-19 pandemic recovery

Brandon Brown, Phoenix Business Journal

Activity in the downtown Phoenix area hasn’t fully recovered since before the Covid-19 pandemic but is performing better than most large cities across North America, according to recent data from the University of Toronto.

Phoenix ranked No. 21 out of 63 downtowns measured, with a 72% recovery rate in the spring of this year compared to the same time period in 2019, according to the university’s research, citing mobile phone data. Salt Lake City had the highest recovery at 139% and San Francisco had the lowest at 32%.

The Phoenix geographical area included in the study spans from south of Interstate 17 through downtown and north to the midtown area. Downtowns were defined in the data based on areas of highest employment density.

Before Covid-19, downtown Phoenix was starting to gain momentum with the light rail, numerous residential projects and the growing higher education and bioscience corridor.

That growth included a new Fry’s downtown grocery store that opened in 2019 near the sports arenas, said Charles Skaggs, a senior vice president at Western Retail Advisors.

“For me, in my world, that was a huge validator that people are living downtown and they’re shopping downtown because Fry’s was having great success,” Skaggs said.

Because the office market took a major hit during Covid, this impacted the retailers that relied heavily on the workday traffic but is now being offset by the growing population in the area, experts say. The Super Bowl in February also helped bring hundreds of thousands of visitors to downtown Phoenix.

Phoenix has lots of downtown cranes — for residential projects

Since 2015, Downtown Phoenix Inc. data shows that nearly 7,500 residential units have been built downtown. As of Q1 2023, about 3,540 additional units were under construction while the current population is 23,919, a 22% increase from the 19,500 residents in 2020.

The growth of apartments in downtown has also contributed to the high number of cranes counted this spring, which totaled nine in Q1 2023. The Business Journals also created a downtown vitality index that assessed the performance of city centers earlier this year, which showed that Phoenix was the 10th best market for downtown recovery since the pandemic out of 40 large metro areas because of migration and air traffic.

Currently, Skaggs said most of the retail options in downtown Phoenix mostly consist of restaurants and entertainment but more boutique shops have started to pop up around Central Avenue and Roosevelt Row. About 75,150 square feet of retail space was under construction in Q1 of this year, according to Downtown Phoenix Inc.

“I think we still have a ways to go in terms of attracting more of what you would see, a mass of soft goods apparel, but I think we’re heading in the right direction,” he said. “It all goes back to the lack of people that had been living down there and now you’ve seen more people taking up primary residence downtown.”

Office sector still faces challenges

Downtown Phoenix’s office sector has struggled to bring back workers and companies while some office towers are starting to look toward turning into housing, hotel or retail uses. But the pandemic also gave office landlords the opportunity to upgrade their properties as more companies are looking for class A office space and amenities for their workers, said John Bonnell, a managing director at JLL.

Some buildings have secured leases in recent months but Bonnell said downtown Phoenix is seeing bigger changes behind the scenes in building ownership as office loans come due.

“I think the skyline on office buildings could get a little smaller, but that’s not a bad thing down there because the remaining buildings are in a really good position to lease space,” he said. “The office is just starting to come back down there. We’ve seen in the past year a lot of existing tenants expand.”

To move the office market forward in downtown Phoenix, Bonnell said the submarket needs to secure a high-profile or technology-related company as a major office tenant. In Q2 of this year, the downtown Phoenix submarket had a 26.9% direct vacancy with average asking rent at $32.94 per square foot.

“We need another one of those to jumpstart the office so we can get a big user or couple of big users to commit downtown so others can say ‘Wow, if they’re down there, it must be the place I need to be,” he added.

Real estate experts say downtown Phoenix still has room for growth as the city works to define what downtown will become in the next 10 years as more people move into the area. The city has been working on plans for a new hotel and expansion at the Phoenix Convention Center and is in the initial stages of examining a new downtown entertainment district.

Originally published by the Phoenix Business Journal on August 15, 2023.

Starbucks Opens Only Metro Phoenix Double Drive Through in Avondale

Western Retail Advisors completes lease for new Indian School Road location

Leading retail brokerage firm Western Retail Advisors (WRA) has completed the lease for a new Starbucks in Avondale, Arizona, featuring the Valley’s first-ever Starbucks double drive through with two order points.

The lease relocates Starbucks from an adjacent, undersized store into a larger, 3,070-square-foot location at 10655 W. Indian School Rd, fronting Indian School Road just east of 107th Avenue and west of the Loop 101 freeway. The building was previously occupied by a KFC but had been vacant for over four years. The new lease renovates and repositions the building for its new use by Starbucks.

Western Retail Advisors Senior Vice Presidents Bryan Babits and Bryan Ledbetter represented the landlord, Atlas BL Avondale, LLC, owned by Laguna Hills-based property management firm Atlas Properties. Lance Umble with Phoenix Commercial Advisors represented Starbucks.

“This new location gave Starbucks the store size it required but could only stack three or four vehicles in its single drive through lane – far below what was needed to manage the anticipated traffic at this site,” said Babits. “Creating a double drive through is a great example of Starbucks creativity, overcoming an operational challenge and already contributing to a 26 percent jump in sales at this new address.”

A leading U.S. retail market, Phoenix at the start of Q2 2023 had absorbed 4.1 million square feet of retail space year-over-year – the strongest absorption since the start of the Great Recession, according to CoStar. The market currently sits at an overall retail vacancy rate of just 5 percent.

“Phoenix’s retail demand is happening not only in traditional stores but also in the Quick Serve Restaurant category, making us one of the nation’s hottest locations for new and expanding concepts,” said Ledbetter. “Those trends are reflected clearly at this Starbucks store.”

Starbucks anticipates it will reach 45,000 stores by the end of 2025 with a mix of potential models. One of those models could include drive-through-only, underscoring the importance of drive-through activity to the chain’s overall success.