Gilbert & Chandler Retail Market Report
Gilbert Submarket Overview
The Gilbert retail submarket, nestled within Phoenix’s East Valley, thrives as a rapidly expanding and affluent sector. With a highly educated population, the area continues to attract prestigious employers across sectors such as health, technology, finance, and advanced manufacturing. Major companies like Deloitte, Northrop Grumman, and GoDaddy anchor the local economy, fostering a consumer base that supports the region’s retail sector. The submarket has been experiencing impressive demand, driving a large increase in average asking rents over the past year. While rent growth may be steady from the high levels witnessed in 2023, it is anticipated to align more closely with the trajectory observed in the past, indicating a stable and sustainable market outlook.
Gilbert Submarket Performance
The Gilbert retail submarket continues to experience strong demand, with rent growth reaching an impressive 8.6%. This has aggressively outpaced the five-year average of 3.1%. Vacancy rates have lowered to 3.1% in the past year, and construction has stayed minimal at 106,000 square feet in deliveries. Approximately $149 million worth of properties were sold over the past year, with private buyers driving most deals. A significant transaction occurred as Coast Meridian Properties purchased SanTan Gateway North for $26.6 million, a 123,200-square-foot multitenant retail center, indicating ongoing interest in larger investment opportunities.
By The Numbers | Last 12 Months | Source: CoStar Group
- Vacancy Rate: 3.1%
- Rent Growth: 8.6%
- Deliveries in SF: 106K
- Absorption in SF: 45.7K
- Sales Volume: $150M
Chandler Submarket Overview
Chandler, situated in Phoenix’s Southeast Valley, has seen significant growth and prosperity over the past decade. It has become a focal point for finance, technology, and professional services, notably driven by major employers like Intel. This economic prosperity has created a strong consumer base, supporting local retailers and fostering demand for commercial space. Those who own properties currently possess substantial control over pricing, with average rents increasing. While expectations suggest rent growth may moderate in the future, the fundamental balance between supply and demand is expected to remain stable, maintaining Chandler’s attractiveness for businesses and retailers alike.
Chandler Submarket Performance
Rent growth in Chandler proves that landlords have gained significant pricing power. The growth has tripled the pre-COVID-19 five-year average of 3%, increasing to an impressive 9.2% over the past year. Construction also positively affects the landlord’s power, with deliveries standing at a low of 17,700. The lowered construction activity has led to a scarcity of available space, reflected in a low vacancy rate of 5.5%, prompting some retailers to consider building their own locations. Sales volume remains active at $85.3 million. Private individual investors, particularly targeting assets under $3 million, dominate the buyer pool, with owner/user transactions and single-tenant triple-net lease deals being popular.
By The Numbers | Last: 12 Months | Source: CoStar Group
- Vacancy Rate: 5.5%
- Rent Growth: 9.2%
- Deliveries in SF: 17.7K
- Absorption in SF: 5.4K
- Sales Volume: $85.3M
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