Q2 Office Leasing on the Upswing in Phoenix

Greater Phoenix saw office leasing activity improve in the second quarter of 2022. CommercialEdge data shows the metro’s vacancy rate was 13.9 percent as of June, having consistently gone down through the past three months. Furthermore, June’s index was 240 basis point lower year-over-year.

Among comparable secondary markets, the metro ranked first at the end of the second quarter, faring better than Charlotte (14.5 percent vacancy rate in June) and Atlanta (20.3 percent). The national rate was at 15.2 percent, up 20 basis points year-over-year.

In terms of listing rates, The Valley’s asking prices started the quarter on an ascending path, with $26.76 per square foot in April and $28.49 per square foot in May. However, in June, the full-service equivalent rate returned to March’s value of $26.96 per square foot, moving further away from the national rate of $37.58 per square foot.

Two large office leases, one landlord

Two of the quarter’s larger office leases involved two mixed-use properties developed by National Realty Investors.

410 E. Rivulon Blvd.

In Gilbert, TD Synnex leased the entire 52,000-square-foot second floor at one of the four buildings of The Commons. The 400,000-square-foot office campus is part of Rivulon, a 300-acre development designed to feature, upon completion, 3 million square feet of office space and 100,000 square feet of retail. The tech data company intends to move to 410 E. Rivulon Blvd. in the beginning of 2023.

Homebuilder Meritage Homes Corp. decided to relocate its headquarters to a new office building underway at Cavasson, a 134-acre, mixed-use development in Scottsdale. The firm signed a lease for 80,000 square feet at the 150,000-square-foot property slated for a fall 2023 completion. At full build-out, Cavasson will encompass roughly 1.8 million square feet of office space, together with 1,600 residences, a full-service hotel, retail and restaurants.

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