Phoenix Market Update: When Investments Bloom

Phoenix’s office transaction activity regained its strength in June, after a very slow May, with deals accounting for only 212,582 square feet of office space across the metro. According to CommercialEdge data, 12 properties totaling 930,627 square feet changed hands for $145 million, marking a 338 percent uptick in square footage month-over-month. The value was also 134.8 percent higher when compared to June 2020, when 396,333 square feet of space sold for $121.6 million.

Once again, investors bet on traditional offices, with only one deal involving a 98,958-square-foot medical office campus. Class B/C properties made up most of the investments across the metro, accounting for 733,785 square feet. Suburban submarkets were once again favored, with transactions totaling 876,060 square feet of space.

The largest sale involved Zovio’s headquarters in Chandler, the 130,642-square-foot Ascend at Chandler Airport Center. Irgens sold the Class A asset to Phoenix-based Silver Creek Development for $34.6 million. Initially completed in 2016, the building was expanded and improved in a build-to-suit project delivered in 2019. Some of the new features include a town hall meeting space with stadium seating, DIRTT modular walls, acoustic panels and white noise systems that eliminate sound overlap.

In terms of square footage, the largest property that traded was Macy’s former credit and customer services center in Tempe. LBA Realty paid $9.1 million for the 221,532-square-foot, Class C asset, in an all-cash transaction. The price tag nearly matches the sum Macy’s spent in the 1996 acquisition of the two-story building—$9.5 million. The retailer closed its Tempe call center in February 2020.

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.