Tag Archives: vacancy

Phoenix office net absorption is outpacing new construction

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Since 2011, more than 9.7 million square feet of office space has been absorbed, outpacing nearly 6.0 million square feet of new deliveries. Overall vacancy is expected to decline in 2017 as employers expand and relocate to the Valley.

Phoenix is experiencing a much more diverse recovery during this economic… Read More

Strong demand in leasing and capital markets – Q3 2015 Office Reports just released

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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… Read More

Q2 Phoenix Industrial Insight: Construction shaping the industrial landscape

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Developers focusing on submarkets with large existing availabilities
The two largest industrial submarkets in the Valley, Southwest and Airport, feature some of the highest availability rates at 16.6 percent and 12.8 percent, respectively. Despite large amounts of available space, including a total of 54 blocks of available space of 100,000 square feet or more, developers have chosen these submarkets as the location for 88 percent of the new, mostly speculative product currently under construction market-wide. Corporate tenants have moved away from the outdated space offerings currently available, preferring to pay a premium for design-builds or newly delivered speculative Class A product that can offer more functional space with larger clear heights.… Read More

Q2 Phoenix Office Insight: Developers easing pressure on popular submarkets

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Speculative developments reducing impact of positive absorption gains
At least 13 development companies are capitalizing on the strong demand and limited supply of high-quality space in the Southeast Valley, delivering 557,957 square feet of new product in the first half of 2015. While the remainder of the properties currently under construction are 74.5 percent pre-leased, the properties that have been delivered year-to-date have been mostly speculative, adding over 448,000 square feet of vacant space to the market. These speculative deliveries have kept pace with the 498,123 square feet of year-to-date net absorption, resulting in a stagnant vacancy rate of 22.3 percent in both the first and second quarter of 2015.

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Phoenix’s skyline Trophy office rental rates continue to rise

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PhoenixSkylineBlogImageDemand for trophy buildings remains high, according to JLL’s 2015 digital skyline review

There’s no space like Trophy space. The premiere office towers that make up Phoenix’s skyline boast—by far—the most expensive office space to rent, garnering asking rents that are 33.5 percent higher than non-Trophy space, according to JLL’s 2015 Digital Skyline. Average Phoenix Trophy rates in the first quarter of 2015 were $26.53 per square foot, compared to $19.87 per square foot in non-Trophy buildings.
This gap between local Trophy and non-Trophy space is approaching peak historical spreads: 10 years ago, the difference was 37.6 percent.… Read More

Phoenix Office Insight: New development returning to pre-recessionary levels

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Bifurcated market
The overall Phoenix office market currently stands 22.2 percent vacant, significantly lower than its recessionary high of 27.1 percent vacant back in 2010, but has a long way to go before it reaches its previous low of 11.2 percent in 2006. As the Valley becomes a much more active market, the divide between the West Valley and East Valley continues to grow. Tenants are choosing to locate along the Loop 101 corridor spanning from Chandler and Tempe in the south to Scottsdale in the North. This activity has brought vacancy in the east below 20 percent as opposed to the west side of Phoenix that continues to struggle with a 27.9 percent vacancy rate.… Read More

Phoenix Class A leads the way

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Phx historical net absorption2

In the years of recovery following the recession, there has been increased demand for quality, Class A office space. Often making up for losses recorded within Class B and C properties, Class A absorption has outpaced that of overall Phoenix since 2008.

Tenants have been flocking towards these newer Class A properties, driving demand… Read More

Chart of the Week: Phoenix medical buildings holding steady

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In honor of Breast Cancer Awareness Month, we explored Phoenix’s medical offices and health care buildings. Strong employment in the healthcare sector helps to keep vacancy rates in medical office and health care buildings steady, with minimal fluctuations in the last five years. Healthcare is one of the leading employment industries in Phoenix:… Read More

Chart of the Week: Phoenix in the lead after the second quarter

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In honor of football season, we explored how the office markets of Phoenix’s rivals in Saint Louis, San Francisco and Seattle matched up to their professional football teams. Phoenix is a rising star both on and off the field, recording the largest absorption gains of the year as of the second quarter.

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Chart of the Week: Phoenix’s green thumb – A few LEED-certified buildings in the valley outperform the market

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COW_Phoenix_March 24v2

Phoenix is home to only a handful of LEED-certified office buildings greater than 20,000 square feet, but data shows that it pays to be sustainable. These LEED-certified buildings are outperforming the rest of the market in terms of vacancy by 5.5 percentage points and are charging a 29.0 percent premium on rental rates.

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