Office Market
The Phoenix office market remains in flux as the new year begins. Businesses continue to reassess their space needs, often leading to downsizing or closures. Meanwhile, job growth in key office-using sectors has been sluggish for over two years, further dampening demand. As a result, vacancy rates have risen by more than 550 basis points since Q4 2019, with further increases expected in the midterm as pre-pandemic leases expire.
| SUB-MARKET | TOTAL SF AVAILABLE | VACANCY RATE | MARKET RENT | NET ABSORPTION SF | UNDER CONSTRUCT SF |
|---|---|---|---|---|---|
| TOTAL: | 197M | 16.9% | $29.82 | 18K | 537K |
| 4 & 5 STAR | 71M | 26.5% | $34.75 | 376K | 384K |
| 3 STAR | 89M | 13.0% | $28.37 | -259K | 153K |
| 1 & 2 STAR | 37M | 7.5% | $23.82 | -99K | 0 |