Office Vacancy Plateaus in Phoenix

The month of April brought no change to Phoenix’s office vacancy rate, CommercialEdge data shows. The metro’s average rate remained at 15.1 percent, unchanged month-over-month and, once again, below the national 15.7 percent. However, the index was 360 basis points lower year-over-year.

When compared to similar secondary markets, The Valley maintained a middle-ground position between Atlanta (20.7 percent vacancy rate) and Charlotte (14.5 percent). Both markets saw improvements in office leasing activity over the month: Atlanta’s index dropped 100 basis points, while Charlotte’s had a 20-basis-point betterment.

Asking rents went down both locally and nationally on a year-over-year basis. The Valley’s full-service equivalent listing clocked in at $26.76 per square foot, down 1.1 percent, while the national rate was at $37.37 per square foot, marking a 2.5 percent decrease.

The metro’s office submarkets with inventories larger than 7 million square feet recorded both rises and decreases in office vacancy month-over-month. Phoenix-Central Corridor had one of the largest improvements, with vacancy down by 210 basis points. At the other edge of the spectrum, Scottsdale-Airpark saw a 310-basis-point vacancy increase.

One of April’s more significant deals closed in the Camelback East submarket. JLL signed a 31,000-square-foot lease at The Grove, planning to relocate its Arizona headquarters at the $400 million mixed-use development. The global brokerage firm will occupy space on the first floor of the 180,000-square-foot office building underway at 4300 E. Camelback Road.

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