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Phoenix Market Reports

Phoenix Office Market

Average Asking Rent (Price/SF) $25.19
Vacancy Rate (%) 19.6%
Net Absorption (SF) 772,130

Tenant demand remained strong with 772,130 square feet of occupancy gains during the second quarter of 2017, pushing the year-to-date absorption total to more than 1.6 million square feet. This marks the highest midyear absorption total in more than 10 years and is on pace to top 3.0 million square feet for the year. The continued large amount of occupancy gains drove the vacancy rate down to 19.6%, a 50-basis-point improvement compared with the prior quarter and a 130-basis-point improvement from the same time a year ago. The direct vacancy rate decreased to 18.5%, and the sublease vacancy remains minimal at a mere 1.1%. An uptick in leasing activity will keep absorption levels high, and the vacancy level will continue to trend downward. The largest lease for the quarter was for 149,273 square feet in downtown Phoenix signed by Quicken Loans, which is relocating its operations from North Scottsdale.

Phoenix Industrial Market

Average Asking Rent (Price/SF) $0.59
Vacancy Rate (%) 9.8%
Net Absorption (SF) 1,154,463

Industrial demand remained positive for the 10th consecutive quarter, as net absorption totaled 1,154,463 square feet in the second quarter of 2017. Year-to-date, the market has recorded more than 4.1 million square feet of occupancy gains, with the majority consisting of large warehouse distribution space in the Southwest Phoenix submarket. Large tenants that occupied existing space this quarter included Summit Warehouse & Logistics (340,000 square feet), AmerisourceBergen (240,000 square feet) and Danby Products (156,000 square feet), all in the Southwest Phoenix submarket. The continued strong demand pushed the total vacancy rate down to 9.8%, a 100-basis-point decline from a year ago and the first time since 2008 that the market's vacancy rate has dropped below the 10.0% mark. In total, nine of the 17 submarkets recorded a total vacancy rate below 10.0%.

Phoenix Office Market Report
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Phoenix Industrial Market Report
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