Office rental rates in the Phoenix market increased to $25.21 per square foot in the second quarter, quickly approaching the previous peak of $26.82 per square foot set in 2007.
With absorption surpassing 12.6 million square feet and only 8.8 million square feet of new deliveries since 2011, the tightening office market has resulted in a significant increase in average asking rents.
Newly Class A space have influenced rate growth in most submarkets. The emerging Warehouse District is revitalizing new construction in Downtown Phoenix, already one of the market’s most expensive submarkets.
Additionally, a new 220,000-square-foot Class A building is set to begin construction by the end of 2017. Block 23 at CityScape is expected to command $38.50 per square foot, well above the Downtown Class A average of $32.20.
Source: JLL Research
About the author
Kiana Cox is a senior research analyst in the JLL Phoenix office who works closely with brokerage and support professionals throughout the western region, as well as colleagues throughout the global JLL organization, to provide best-in-class research that differentiates JLL.