Office Market
Even though over four years have passed since the start of the COVID pandemic, changes indemand caused by it still generate uncertainty in the Phoenix office market. Users are carefullyevaluating the effectiveness and size of their current office spaces in light of evolving workplacestrategies. Some tenants are choosing to reduce and centralize their space while others arerefraining from leasing larger areas, anticipating future staff expansions. The persistent decreasein demand has resulted in a more than 50% rise in vacant office space since the fourth quarter of2019, with 2023 witnessing a faster pace of moving out compared to the previous two years.
| SUB-MARKET | TOTAL SF AVAILABLE | VACANCY RATE | MARKET RENT | NET ABSORPTION SF | UNDER CONSTRUCT SF |
|---|---|---|---|---|---|
| TOTAL: | 196M | 15.9% | $29.69 | -199K | 990K |
| 4 & 5 STAR | 70M | 24.8% | $35.02 | -178K | 803K |
| 3 STAR | 87M | 13.0% | $28.27 | 114K | 187K |
| 1 & 2 STAR | 40M | 6.8% | $23.39 | -135K | 0 |