Capital markets activity driving increased rents in Camelback Corridor
Currently at $31.90 on a full service basis, average asking rates across Class Aproperties in the Camelback Corridor submarket have increased 13.4 percent injust 12 months. This incredible rental rate growth has significantly outpaced thatof market-wide Class A rental rates, which have increased only 6.7 percent overthe same time period. Despite a 21.9 percent vacancy rate, buyers haveinvested over $295 million in high-profile Class A properties so far this year,encouraging landlords to push rents throughout the submarket. As capitalmarkets continue to drive rental rate growth, tenants can expect to pay apremium for quality space within the Camelback Corridor.
Increasing development activity in the Southeast
The Southeast Market Area, which includes the Airport, Chandler, Tempe, andSouth Tempe/Ahwatukee submarkets, continues to lead the construction activityin Metro Phoenix. Of the nearly 4.0 million square feet of office space underconstruction in the metro area, more than 3.4 million square feet are located inthe Southeast Valley. Tempe alone is adding over 2.4 million square feet to itscurrent 4.1 million square feet of existing inventory. Much of this new activity iscomprised of build-to-suit projects, including the highly anticipated MarinaHeights office campus. This five-building regional headquarters for State Farmwill encompass nearly 2.1 million square feet.
Spillover demand benefitting submarkets near Tempe
Tempe is arguably the tightest submarket in Phoenix, with an 11.3 percentoverall vacancy rate and a 3.2 percent vacancy rate across Class A properties.Situated just north of the Tempe, the South Scottsdale submarket is 9.8 percentvacant overall and 8.0 percent vacant across Class A properties. With very fewoptions remaining for tenants over 20,000 square feet within Tempe and SouthScottsdale, the submarkets neighboring them have recorded healthy absorptiongains in 2015. A total of 915,302 square feet have been absorbed across eightneighboring submarkets, with four of them recording the lowest overall vacancyrates in Phoenix behind Tempe and South Scottsdale.
Learn more. Download our full Q3 office reports and dashboards:
- Office Insight Q3 2015 Phoenix
- Office Statistics Q3 2015 Phoenix
- Construction Activity Q3 2015 Phoenix
- Leasing Activity Q3 2015 Phoenix
- Sales Activity Q3 2015 Phoenix
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