Office Market
Office vacancy in Phoenix continues to rise steadily as the year comes to a close. Many businesses are reevaluating their space needs, often leading to downsizing or closures. Additionally, job growth in traditional office-using sectors has remained sluggish for over two years. This sustained drop in demand has driven vacancy rates up by more than 550 basis points since Q4 2019. Further increases are anticipated in the midterm as pre-pandemic leases reach expiration.
SUB-MARKET | TOTAL SF AVAILABLE | VACANCY RATE | MARKET RENT | NET ABSORPTION SF | UNDER CONSTRUCT SF |
---|---|---|---|---|---|
TOTAL: | 197M | 16.9% | $29.97 | -359K | 567K |
4 & 5 STAR | 71M | 27.3% | $34.93 | -192K | 384K |
3 STAR | 89M | 12.7% | $28.72 | -129K | 183K |
1 & 2 STAR | 37M | 7.4% | $23.40 | -37K | 0 |