New home construction fuels grocery store expansion in Phoenix area
PHOENIX — Home building has fueled a red hot commercial real estate market in the Phoenix area.
As new homes are built, new trade areas are created.
Alan Zell, the founder of Zell Commercial Real Estate Services, said one particular area of the Valley has gotten a lot of attention in the real estate sector.
“You’re seeing a lot of new real estate — commercial retail real estate — being developed in the southeast Valley, compared to elsewhere,” Zell said, namely Chandler and Queen Creek.
Zell said the northwest Valley’s commercial real estate market has also shown great improvement, making it the second-hottest general area.
“There are new developments there,” Zell said. In the west, “Buckeye has started to see a resurgence in retail.”
Zell said developers of shopping center sites have to feel comfortable about their properties and locations.
“It’s not just the supermarkets. The developers have to feel comfortable they can build additional space for leasing to satellite tenants,” Zell said. That means restaurants, drug stores and other service-oriented establishments.
Zell said the grocery store chain Aldi has been looking at what he describes as “in-fill areas” because they are a small format grocery store.
“They (Aldi) are looking at some in-fill areas in the metropolitan area, not just brand new shopping center locations,” Zell said.