right-arrowCreated with Sketch. Contact us

July 2026 – Knowing the Numbers In Commercial Real Estate

Office Market

The Phoenix office market continues to recover gradually as improving demand and accelerating demolitions reduce vacancy. Vacancy has improved to 15.8%, down from a 2024 peak of 17.1%, supported by 593,000 SF of positive net absorption and limited new supply. Leasing volume is now within 5% of pre-pandemic levels, with tenants favoring pre-built suites and amenity-rich buildings. Rent growth remains modest at 1.5%, with premium assets outperforming while older suburban offices continue to lag.

SUB-MARKET TOTAL SF AVAILABLE VACANCY RATE MARKET RENT NET ABSORPTION SF UNDER CONSTRUCT SF
TOTAL: 192M 15.8% $30.68 -117K 1.4M
4 & 5 STAR 69M 24.4% $36.09 7K 1M
3 STAR 89M 12.5% $28.90 -127K 329K
1 & 2 STAR 35M 7.1% $24.39 2K 0

INDUSTRIAL MARKET

The Phoenix industrial market is stabilizing as easing deliveries meet steady tenant demand. Vacancy has improved to 10.5%, though it remains elevated after a historic construction surge. Net absorption reached 22.8 million SF over the past year, driven largely by logistics and advanced manufacturing users. However, 22.2 million SF remains under construction, keeping supply pressure in place. Rent growth has slowed to 3.1% as tenants gain more options, but slowing deliveries should support gradual vacancy improvement through 2026.

SUB-MARKET TOTAL SF AVAILABLE VACANCY RATE MARKET RENT NET ABSORPTION SF UNDER CONSTRUCT SF
TOTAL: 523M 10.5% $13.16 -252K 22M
LOGISTICS 376M 12.3% $12.21 -88K 13M
SPECIALIZED 116M 5.0% $14.67 -40K 8.8M
FLEX 31M 9.7% $19.09 -123K 88K

MULTI-FAMILY MARKET

The Phoenix multifamily market is showing early signs of improvement as strong renter demand begins absorbing recent supply. Net absorption reached 21,391 units over the past year, slightly exceeding the 20,215 units delivered, helping vacancy improve to 11.4%. However, vacancy remains elevated and rent growth is still negative at -2.1%, with concessions common across new communities. The construction pipeline has dropped more than 50% from its peak, which should help supply pressure ease and support a gradual recovery into 2027.

SUB-MARKET TOTAL SF AVAILABLE VACANCY RATE MARKET RENT NET ABSORPTION UNITS UNDER CONSTRUCT UNITS
TOTAL: 438K 11.4% $1,568 -198 16K
4 & 5 STAR 215K 12.5% $1,793 -44 13K
3 STAR 159K 10.9% $1,410 -141 3K
1 & 2 STAR 64K 9.3% $1,109 -13 55

RETAIL MARKET

The Phoenix retail market remains tight despite a modest rise in availability tied to store closures and bankruptcies. Vacancy is holding at 4.7%, while availability has increased to 5.0%, still well below historical averages. Tenant demand remains healthy, with 2.4 million SF of net absorption over the past year as off-price, dollar store, grocer, and experiential users backfill vacant space. Rent growth has moderated to 4.3% but remains among the strongest nationally. Limited construction should keep fundamentals strong.

SUB-MARKET TOTAL SF AVAILABLE VACANCY RATE MARKET RENT NET ABSORPTION SF UNDER CONSTRUCT SF
TOTAL: 247M 4.7% $27.14 -30K 2.7M
POWER CENTER 34M 4.3% $30.14 -610 384K
NEIGHBORHOOD CENTER 92M 5.9% $26.16 -33K 707K
GENERAL RETAIL 90M 3.6% $26.12 520 1.2M

Data Center Dilemma

April 13, 2026

Top 5 Reasons For and Against the Push for Data Centers in Arizona Arizona is quickly becoming one of the hottest data center markets in the country. With AI expansion,

Learn More »

Projects We Are Watching

March 2, 2026

The Projects I’m Watching Closely I get asked all the time, “What’s actually happening out there?” Short answer? A lot. Long answer? The Valley is evolving in real time. Industrial

Learn More »