Office Market
Office vacancy rates in Phoenix continue to climb as the third quarter draws to a close. Many companies are reevaluating their space needs, often leading to downsizing or closures. Job growth in sectors that typically rely on office space has also been sluggish for more than two years. As a result, vacancy rates have risen by over 550 basis points since Q4 2019, with expectations of further increases in the coming months as pre-pandemic leases expire.
| SUB-MARKET | TOTAL SF AVAILABLE | VACANCY RATE | MARKET RENT | NET ABSORPTION SF | UNDER CONSTRUCT SF |
|---|---|---|---|---|---|
| TOTAL: | 197M | 16.8% | $29.57 | 146K | 904K |
| 4 & 5 STAR | 69M | 27% | $34.21 | 100K | 732K |
| 3 STAR | 91M | 13% | $28.70 | 67K | 172K |
| 1 & 2 STAR | 38M | 7.3% | $23.14 | -21K | 0 |