Office Leasing Improves in Phoenix

1 min read

The Valley’s vacancy rate dropped by 120 basis points.

Phoenix’s office market showed great improvement in leasing activity in May, according to CommercialEdge data. The metro’s vacancy rate dropped to 13.9 percent, marking a 120-basis-point betterment month-over-month and, once again, remaining below the national average of 15.4 percent. The index was also 310 basis points lower year-over-year.

In a comparison with similar secondary markets, The Valley surpassed Charlotte (14.7 percent vacancy rate) for the first time in many months and moved further away from Atlanta, which had a 20.0 percent vacancy rate. The latter saw a 70-basis-point improvement over the month, while Charlotte’s index went up 20 basis points.

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Asking rents went up across the metro on a year-over-year basis, going against the national trend. The Valley’s full-service equivalent listing clocked in at $28.49 per square foot, up 6.2 percent, while the national rate was at $37.56 per square foot, marking a 2.1 percent decrease.

When taking a closer look at the office submarkets with inventories larger than 7 million square feet, most of them saw bigger or smaller changes for the better in leasing activity over the month. Scottsdale – Airpark had one of the largest improvements, with vacancy down by 370 basis points, followed by Scottsdale – Shea Corridor, with a 160-basis-point betterment.

CommercialEdge covers 8M+ property records in the United States. View the latest CommercialEdge national monthly office report here.

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