2015 Year End Market Summary
Metro Phoenix Multi-Tenant Shopping Centers (10,000–100,000 SF)
Rein Retail Report • Mark Rein • Rein & Grossoehme
The 2015 market recorded 124 sales totaling $483.0 million and 4.18 million square feet. Average sale price was $3.90 million (range $150,000 to $15 million), average size was 33,711 SF, and average price per square foot stood at $126.25. Cap rates averaged 7.93 percent (5.5–14.9 percent), occupancy averaged 74.4 percent, and average rent per foot was $14.11. Net absorption in the centers that sold was a positive 81,477 SF. This was a high-volume year with a wide range of product trading, reflecting a still-recovering post-recession market.
Interest rates remained low throughout most of 2015 as the Federal Reserve kept policy rates near zero before beginning a gradual tightening cycle late in the year. Cap rates stayed relatively elevated, consistent with the higher cost of capital that still lingered from the previous cycle. The spread between long-term commercial mortgage rates and cap rates was relatively wide, giving leveraged buyers more room.
Overall, 2015 showed a market that was active but still digesting a broad mix of quality. Volume was high, pricing was moderate, and occupancy had room to improve.
Refer to the Rein Retail Report for more data & statistics.
Data source: CoStar. Sales of multi-tenant shopping centers from 10,000 to 100,000 sq. ft.
Mark Rein • Selling Shopping Centers Since 1981
480.214.9414 • Mark@RGcre.com