Phoenix Office Market
| Average Asking Rent (Price/SF) | $27.15 |
| Vacancy Rate (%) | 18.2% |
| Net Absorption (SF) | 329,512 |
After a stale 2020 where traditional office transactions slowed and vacancy increased as companies returned space to the market, 2021 is showing strong market fundamentals; recovery for the sector is underway. Most of the large leases that occurred this quarter were new direct deals, a welcome change from the renewals and subleases of 2020. Additionally, sale transaction volume continued its rise from the end of 2020, with a 34.1% year-over-year increase at midyear 2021. Economic recovery in terms of job growth have stagnated somewhat, with the unemployment rate fluctuating between 6.0% and 6.7% since August 2020, ending at 6.2% in May 2021, slightly higher than the national average for the same month at 5.8%. Although the unemployment rate is still above pre-pandemic levels that hovered near 3.5%-4.0%, recovery signs are seen across the metro with positive job growth across almost all industries year-over-year, vaccine rollout to half the population and higher mobility metrics than other areas of the country, Phoenix is poised for a swifter recovery from the COVID-19-induced recession compared to the Great Recession.
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Phoenix Industrial Market
| Average Asking Rent (Price/SF) | $0.70 |
| Vacancy Rate (%) | 6.8% |
| Net Absorption (SF) | 5,047,605 |
Industrial fundamentals remain strong in the Valley of the Sun with high net absorption, lowering vacancy rates and rising asking rents continuing to be the norm. Due in part to a talented labor force, strong population and job growth, lower relative cost of development to California markets and access to 35 million consumers within a one-day truck drive, the Phoenix industrial market continues to see a surge in leasing by logistics, distribution and ecommerce tenants.
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