Phoenix Market Update: Investments Cool Down

After solid transaction activity in March, when 1.4 million square feet of office space traded across the metro, Phoenix’s office market cooled down in April. CommercialEdge data shows only four properties totaling 483,541 square feet changed hands for $64 million, a 65 percent drop in square footage when compared to the previous month. However, the value was 37.7 percent higher year-over-year, as 301,432 square feet of space sold for $52 million in April 2020, at the onset of the COVID-19 pandemic.

Investors acquired mainly traditional offices, with only one deal involving a 33,000-square-foot medical office building. Transactions concerned all types of property classes, but three of the four assets were Class B/C properties. At the same time, the majority of sales, totaling 450,541 square feet of space, closed in suburban submarkets.

The largest asset that changed hands was the 325,788-square-foot Mesa Tower in Phoenix’s suburb of Mesa. Dallas-based CAMCO Investment Group paid $39.5 million for the 16-story tower formerly known as Bank of America Financial Plaza. The Class A property traded for nearly double the price it sold for in 2017, when Barker Pacific Group purchased it for $23 million.

CommercialEdge covers 8M+ property records in the United States. View the latest CommercialEdge national monthly office report here. We included properties of 25,000+ square feet in our research.