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Phoenix Market Reports

Phoenix Office Market

Average Asking Rent (Price/SF) $25.67
Vacancy Rate (%) 18.3%
Net Absorption (SF) 752,012

After a strong 2017, the metro Phoenix office market's rapid expansion carried over into the new year, as the market recorded 752,012 square feet of positive absorption in the first quarter of 2018. This total was nearly 300,000 square feet more than last quarter's absorption total. Six tenants each took occupancy in space larger than 100,000 square feet during the quarter, including Centene, Union Bank, Consumer Cellular and Quicken Loans. The market's vacancy rate finished at 18.3%, a 200-basis-point improvement from a year ago and the lowest rate since early 2008. The Chandler/Gilbert submarket led the market with a total of 272,661 square feet of positive absorption, as Liberty Mutual, Allstate Insurance and Orbital AKT took occupancy. The Chandler/Gilbert submarket's vacancy rate declined a staggering 520 basis points from the prior quarter, from 23.0% to 17.8%. The East Valley submarkets of Airport Area, Chandler/Gilbert and Tempe continued to experience a majority of the overall market's office growth for absorption, rising rents rates and construction activity.

Phoenix Industrial Market

Average Asking Rent (Price/SF) $0.62
Vacancy Rate (%) 8.4%
Net Absorption (SF) 669,598

Following a healthy 2017, tenant demand cooled during the first quarter of 2018, which posted 669,598 square feet of total absorption. Warehouse/distribution space accounted for 600,000 square feet of the market's total. The Gilbert submarket led all submarkets in absorption, expanding by nearly 256,000 square feet, as Footprint Manufacturing (131,796 square feet) and United Solutions (120,700 square feet) took occupancy in new buildings in the submarket this quarter. The Southwest Phoenix posted an unusually low absorption total of 170,627 square feet during the quarter, but pent-up demand and the completion of new product over the next few quarters will push the total back up to levels above 500,000 square feet per quarter. The overall vacancy rate finished the quarter at 8.4%, a 70-basis-point improvement from a year ago, and dropping to pre-recession lows.

Phoenix Office Market Report
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Phoenix Industrial Market Report
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