Phoenix Real Estate Market Reports

Phoenix Office Market

First-quarter net absorption totaled 633,066 SF, marking the second consecutive quarter of positive absorption. Nearly 42% of this total was from Republic Services taking occupancy of its 265,525-SF build-to-suit headquarters in March. Total vacancy tightened to 23.5%, a decrease of 120 bps from last quarter and 170 bps lower than one year ago. This improvement is primarily due to office buildings being removed from inventory and redeveloped into other property types. Asking rents were up 2.0% year over year. Desirable Class A options continue to lease quickly, while older, long-vacant spaces are dragging down average rates. Sublet availability remains low at 4.2%. With no new construction starts this quarter, limited supply could push vacancy lower and support rent growth, particularly in the trophy segment.

Phoenix Industrial Market

Quarterly net absorption of 2.9 MSF, combined with heavily pre‑leased deliveries totaling 3.8 MSF, reduced vacancy to 12.8%. Total vacancy has been in the double-digits since mid-2024 and has decreased for three-straight quarters. Total vacancy was down 20 bps from last quarter and 100 bps from year-end 2024. Available sublease space rose 6.4% from last quarter to reach 7.4 MSF. Class A has dominated overall leasing activity since 2019. This year, Class A buildings accounted for 67% of total leasing. Maricopa County was named the top county in the U.S. by Site Selection magazine for capital investment, largely driven by its dominance in advanced manufacturing, particularly for semiconductor fabrication, data centers, and supporting logistics.