Phoenix retail experienced a record-breaking year in 2021. Although the Valley of the Sun saw some disruptions due to evolving consumer habits and the pandemic, Phoenix is now one of the hottest markets for investor demand. Out-of-state investor interest soared due to the massive wave of population growth, fueling demand for retail investments throughout the city. This is especially true for grocery-anchored centers, drugstores, drive-thrus, and home improvement stores. Leasing volume has increased, and the supply pipeline has stabilized, putting the market in a better position than in the past. Transaction activity is strong, fueled by California buyers looking for higher yields compared to its coastal counterparts. Overall, the Phoenix retail market is performing well and looks to be continuing its momentum into 2022.