If you need assistance, please call 480-365-8346

Phoenix office market surges in 2019 as major leases, sales lead the way

Monday, March 2, 2020   /   by Juan Grimaldo

Phoenix office market surges in 2019 as major leases, sales lead the way

Capture.JPG
PROVIDED BY LINCOLN PROPERTY CO.

The Phoenix office market finished 2019 on a high note, with a decrease in the region's overall vacancy rate and increases in net absorption, construction and rents, according to research from Colliers International.


In 2019, 3.4 million square feet of new office product came online in the market, and much of that product or buildings still under construction was claimed by tenants before it was even completed.


Food delivery app DoorDash leased the entire building at the Grand 2, part of the Grand at Papago Park Center, and Open Door leased more than 100,000 square feet in the Watermark, where coworking giant WeWork had already leased two floors.


“Block 23 delivered at 55% leased, so we never had the whole building hit inventory,” said Phillip Hernandez, research manager at Colliers International.


The market’s vacancy rate dropped to 12.7% at the end of the fourth quarter, and a million square feet of office space was absorbed during the quarter. In the 12-month period that ended in November 2019, 56,500 new jobs were added in the market.


Southwest Phoenix, which had a 6.5% vacancy rate, had the tightest overall vacancy for a submarket, overtaking Tempe, which had consistently had the lowest vacancy in the Valley. Tempe had a 7.5% vacancy rate at the end of the year.


In Tempe, the 100 Mill office building has begun construction, and is already 44% pre leased by Deloitte and another office tenant that has not been announced.


“Tempe is one of the hottest submarkets with an extremely high rent rate,” Hernandez said. “I expect positive activity in Tempe with 100 Mill and the Watermark.”


Looking into 2020, the outlook for the Phoenix office market remained strong as employers continued to add employees and companies continue to move to and expand in Arizona, Hernandez wrote in an analysis.


Author:By Corina Vanek  – Reporter, Phoenix Business Journal

 
Keller Williams Realty Professional Partners - The Grimaldo Group
Juan Grimaldo
7025 West Bell Road #10
Glendale, AZ 85308
480-365-8346

© 2020 Arizona Regional Multiple Listing Service, All rights reserved. The data relating to real estate for sale on this website comes in part from the Arizona Regional Multiple Listing Service. Real estate listings held by brokerage firms other than Juan Grimaldo - Keller Williams Realty Professional Partners - The Grimaldo Group (WINBACK) are marked with the Arizona Regional Multiple Listing Service logo and detailed information about them includes the name of the listing brokers. All information deemed reliable but not guaranteed and should be independently verified. All properties are subject to prior sale, change or withdrawal. Neither listing broker(s) nor Arizona Regional Multiple Listing Service shall be responsible for any typographical errors, misinformation, misprints and shall be held totally harmless. October 29, 2020
This site powered by CINC: www.cincpro.com