Commercial rental rates in Ahwatukee Foothills are likely to fall over the next year, which could make the area more attractive to businesses, according to an analysis by the real estate firm Grubb & Ellis.
Rental rates are predicted to continue to dip until the third quarter because of the amount of vacant space available in the market, according to the firm. Julia McCartney, a Grubb & Ellis spokeswoman, said the Ahwatukee market vacancy rate is relatively low at 8 percent compared to other sections of Phoenix.
"Rental rates in Ahwatukee have already started to level out so I would expect to see maybe a slight decrease, but for the most part, they should see a recovery a little sooner than end of 2011," she said.
Terri Kimble, president of the Ahwatukee Foothills Chamber of Commerce, said that while it's never good to have a lot of vacancies, decreasing rental rates could help attract more businesses to the area.
"It could be positive for those that are going in with a lease," Kimble said.
In Phoenix, Grubb & Ellis expects retail tenants will gradually enter the market in 2011 to take advantage of lower rental rates. The majority of the leasing activity during the year is expected to come from local and regional tenants seeking expansion or relocation opportunities.
"The Phoenix retail market will see activity return slowly in 2011 as businesses begin feeling confident about consumer spending once more," said Pete Bolton, executive vice president and managing director of Grubb & Ellis' Phoenix office. "This year will prove to be one where the market finds its balance, with a quicker recovery in sight for 2012."
Prospective tenants likely will continue to find deals, such as reduced rent, over the next several months, he said.
"What's helped the Phoenix region is its relatively low cost for doing business and friendly environment," Bolton said.