Phoenix Office Market
| Average Asking Rent (Price/SF) | $26.66 |
| Vacancy Rate (%) | 17.5% |
| Net Absorption (SF) | 58,320 |
The negative impact of COVID-19 in Phoenix in 2020 left the office market stale for most of the year, especially in the latter half. Leasing velocity slowed down tremendously, with short-term lease renewals or extensions comprising the bulk of activity. Although the Phoenix economy is more diversified than other surrounding metros, such as Las Vegas or Los Angeles, the effect was felt across all industries for both landlords and tenants alike. Furthermore, Phoenix was one of a handful of metros across the metro that saw an unfortunate rise in unemployment near the end of 2020 instead of a continual decline—an alarming metric when combined with higher vacancy and negative absorption. The first quarter of 2021 shows that despite the weak end of 2020, Phoenix was able to recover positive market indicators that illustrate the metro has the capability to come out of this recession in a stronger position than before the pandemic.
Download Phoenix Office Market Report 1Q21Phoenix Industrial Market
| Average Asking Rent (Price/SF) | $0.67 |
| Vacancy Rate (%) | 7.8% |
| Net Absorption (SF) | 5,113,237 |
The trends present at year-end 2020 in the Phoenix industrial market continued into the first quarter of 2021, with strong tenant demand for new space and high levels of construction. Net absorption measured 5.1 million square feet for the quarter, which is the second consecutive quarter of 5.0-million-plus square feet of positive net absorption. Vacancy ticked down 50 bps, given the strong demand for space, even with just over 3.0 million square feet delivering to the market in the quarter. The average asking rent rose 3.0% year over year, driven in part by new, Class A space commanding higher asking rents.
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