{"id":1004694540,"date":"2024-01-10T06:19:55","date_gmt":"2024-01-10T14:19:55","guid":{"rendered":"https:\/\/www.commercialsearch.com\/news\/?p=1004694540"},"modified":"2024-07-25T03:53:42","modified_gmt":"2024-07-25T11:53:42","slug":"phoenix-office-deal-volume-increases-construction-still-slow","status":"publish","type":"post","link":"https:\/\/www.commercialsearch.com\/news\/phoenix-office-deal-volume-increases-construction-still-slow\/","title":{"rendered":"Phoenix Office Deal Volume Is Up, Construction Still Slow"},"content":{"rendered":"
\"18695<\/a>

Nationwide Realty Investors completed Cavasson, a 150,000-square-foot office building in Scottsdale, Ariz. Image courtesy of CommercialEdge<\/em><\/p><\/div>\n

As last year wound down, construction activity in Phoenix slowed, while office investment picked up since the beginning of the year, pushing the city toward the highest-ranking markets across gateway metros, according to CommercialEdge data<\/a>.<\/p>\n

As of November, Phoenix had 1 million square feet of office space under construction across 19 properties, representing 0.6 percent of the existing inventory, below the national average of 1.7 percent. The metro\u2019s pipeline trailed Charlotte, N.C., and Houston, both with 2.8 million square feet underway, Nashville, Tenn., (3 million square feet) and Atlanta (3.2 million square feet). San Diego (5.2 million square feet) and Austin, Texas, (5 million square feet) were other high-volume secondary markets that still had large office pipelines.<\/p>\n

Recent office deliveries<\/h2>\n

In terms of delivered space, Phoenix had 506,890 square feet of completed office space spread across eight properties in the year\u2019s first 11 months, while construction starts amounted to 634,430 square feet across 12 properties. One of Greater Phoenix\u2019s significant office deliveries was Nationwide Realty Investors<\/strong>\u2019 150,000-square-foot office building within Cavasson, a mixed-use campus in Scottsdale, Ariz. The project broke ground in 2022 and was completed at the beginning of October.<\/p>\n

\"Rio<\/a>

Building A is part of Rio Yards at Novus Innovation Corridor. Image courtesy of CommercialEdge<\/em><\/p><\/div>\n

Another significant delivery included Rio Yards at Novus Innovation Corridor\u2019s Building A, a 148,356-square-foot office property in Tempe, Ariz. Completed in August by developer Wentworth Property Co.<\/strong>, the building is part of a 448,356-square-foot office campus.<\/p>\n

Meanwhile, a notable groundbreaking was Building 3, Carvana<\/strong>\u2019s 132,014-square-foot Class A development in Tempe. The project is part of the firm’s office complex and has a completion date set in May 2024. At full build-out, the car retailer’s campus would total nearly 785,000 square feet, with some 300,000 square feet pertaining to office space.<\/p>\n

Phoenix among the nation’s leaders in office investment<\/h2>\n

Year-to-date through November, 5.9 million square feet of office space changed hands in Phoenix for a total of $948 million. Compared to other gateway metros, Phoenix came in second to The Bay Area ($1.06 billion) and surpassed Austin ($496 million), San Diego ($495 million), Atlanta ($480 million), Houston ($413 million) and Raleigh-Durham, N.C. ($244 million).<\/p>\n

Investments in The Valley seemed to pick up since the start of the third quarter<\/a>, when CommercialEdge data showed 3.6 million square feet of space changing hands for $587 million. In the January-July interval, the average sale price was $213 per square foot.<\/p>\n

In the year\u2019s last quarter through November, some 883,193 square feet of space across nine properties traded in the metro for a combined $124 million. The highest-performing quarter for investments was the third one, when 2.3 million square feet of space changed hands for $335 million.<\/p>\n

\"Banner<\/a>

Banner Health Center Plus is part of the $400 million mixed-use development The Grove. Image courtesy of Virtus Real Estate Capital<\/em><\/p><\/div>\n

Phoenix office properties traded at an average price of $183.5 per square foot, year-to-date through November, below the national figure of $192.8. When compared with other gateway markets, Phoenix was pricier than Dallas ($165.1 per square foot), Atlanta ($157.1 per square foot), Charlotte ($144.7 per square foot) and Houston ($127.3 per square foot), but below San Diego ($402.3 per square foot) and The Bay Area ($331.4 per square foot).<\/p>\n

One of the priciest office deals in the metro remains Virtus Real Estate Capital<\/strong>\u2019s $48.5 million acquisition<\/a> of Banner Health Center Plus at The Grove, a 70,000-square-foot medical office building in Phoenix. The property is part of The Grove, RED Development<\/strong>‘s $400 million mixed-use project encompassing more than 750,000 square feet.<\/p>\n

Phoenix was one of the top 20 U.S. metros by active office loan volumes, with more than $14.9 billion as of October 2023. CommercialEdge recently did a deep dive into the office sector’s total exposure to credit<\/a> amid rising headwinds.<\/p>\n

Office leasing on a downward trajectory<\/h2>\n

Office vacancy in Phoenix clocked in at 19.2 percent as of November, with the national vacancy rate set at 18.2 percent. Vacancy has increased in the metro since the beginning of the year, starting at 17.0 percent in January, and continuing with 18.8 percent in June. Among similar markets, Phoenix lagged Charlotte (15.7 percent), Atlanta (17.4 percent) and Dallas (18.9 percent), but surpassed The Bay Area (20.3 percent) and Austin (21.2 percent).<\/p>\n

\"One<\/a>

Menlo Equities signed a full-building lease at One Compass Center. Image courtesy of JLL<\/em><\/p><\/div>\n

One of the largest office deals was Vanguard Group<\/strong>\u2019s 133,634-square-foot expansion at Northsight Corporate Center, in the Scottsdale Airport submarket. CIM Group<\/strong> has been the owner of the 141,534-square-foot office building since 2019.<\/p>\n

The metro\u2019s largest office lease of last year was signed in December: Peckham Inc<\/strong>. committed to 136,194 square feet<\/a>, fully occupying One Compass Center, a Class A office building in the South Phoenix submarket. Cushman & Wakefield<\/strong> negotiated on behalf of the landlord, Menlo Equities<\/strong>.<\/p>\n

Future flex office hotspot?<\/h2>\n

As of November, Phoenix had 1.3 million square feet of shared office space, more than Austin and San Diego, each having 1.1 million square feet. Across other gateway markets, The Valley was surpassed by Dallas (2.4 million square feet), Atlanta (2.1 million square feet) and Houston (1.9 million square feet).<\/p>\n

The metro’s share of coworking space as percentage of total leasable office space reached 1.6 percent in November, surpassing Charlotte (1.3 percent), while being outpaced by Raleigh-Durham and Nashville (2.7 percent) and Atlanta (2.1 percent), as well as by Dallas, Houston and Austin, with their numbers on par with the national average of 1.7 percent.<\/p>\n

\"Kierland<\/a>

Industrious has a new Scottsdale coworking location at Kierland Commons. Image courtesy of CommercialEdge<\/em><\/p><\/div>\n

Year-to-date through November, flex office provider Cubework had the largest footprint of total leasable office space, with Phoenix locations totaling 1,944,745 square feet. The company was followed by Regus, with 466,097 square feet, and WeWork, with 239,316 square feet.<\/span><\/p>\n

Recent new coworking spaces in the metro include Industrious<\/strong>‘ new 27,263-square-foot location<\/a> in Scottsdale, Ariz. The new space will be located at Kierland Commons, a 466,700-square-foot mixed-use building owned by Macerich<\/strong>. The deal marked the flex office provider\u2019s sixth location in Arizona, and its third one in Scottsdale.<\/p>\n

In July, Lucid Private Offices<\/strong> signed a 26,910-square-foot lease<\/a> at 24th at Camelback II, a 306,877-square-foot office building owned by Hines<\/strong> and Invesco Real Estate<\/strong>. The deal marks the Texas-based tenant\u2019s first coworking location in the state.<\/p>\n","protected":false},"excerpt":{"rendered":"

CommercialEdge data places the market among the leading gateway cities for investment.<\/p>\n","protected":false},"author":2991,"featured_media":1004694604,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21782,21808,22251,21783,52420,21742,21747,1601,15],"tags":[51047,50674],"class_list":["post-1004694540","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-development","category-featured","category-in-focus","category-investment","category-market-updates","category-latest","category-office","category-phoenix","category-west","tag-marketupdate","tag-commercialedge"],"acf":[],"yoast_head":"\nPhoenix Office Deal Volume Is Up, Construction Still Slow - Commercial Property Executive<\/title>\n<meta name=\"description\" content=\"How this gateway is stacking up against the competition, according to the latest office data from CommercialEdge.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.commercialsearch.com\/news\/phoenix-office-deal-volume-increases-construction-still-slow\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Phoenix Office Deal Volume Is Up, Construction Still Slow\" \/>\n<meta property=\"og:description\" content=\"How this gateway is stacking up against the competition, according to the latest office data from CommercialEdge.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.commercialsearch.com\/news\/phoenix-office-deal-volume-increases-construction-still-slow\/\" \/>\n<meta property=\"og:site_name\" content=\"Commercial Property Executive\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/CPExecutive\" \/>\n<meta property=\"article:published_time\" content=\"2024-01-10T14:19:55+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2024-07-25T11:53:42+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2023\/12\/18695-North-Claret-Drive-Scottsdale-AZ-CAVASSON-img-1-e1702982674656.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1000\" \/>\n\t<meta property=\"og:image:height\" content=\"750\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Simona Tudose\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@cpexecutive\" \/>\n<meta name=\"twitter:site\" content=\"@cpexecutive\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.commercialsearch.com\/news\/phoenix-office-deal-volume-increases-construction-still-slow\/\",\"url\":\"https:\/\/www.commercialsearch.com\/news\/phoenix-office-deal-volume-increases-construction-still-slow\/\",\"name\":\"Phoenix Office Deal Volume Is Up, Construction Still Slow - Commercial Property Executive\",\"isPartOf\":{\"@id\":\"https:\/\/www.commercialsearch.com\/news\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.commercialsearch.com\/news\/phoenix-office-deal-volume-increases-construction-still-slow\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/www.commercialsearch.com\/news\/phoenix-office-deal-volume-increases-construction-still-slow\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2023\/12\/18695-North-Claret-Drive-Scottsdale-AZ-CAVASSON-img-1-e1702982674656.jpg\",\"datePublished\":\"2024-01-10T14:19:55+00:00\",\"dateModified\":\"2024-07-25T11:53:42+00:00\",\"author\":{\"@id\":\"https:\/\/www.commercialsearch.com\/news\/#\/schema\/person\/4659e2337f06b61cefc6b0b897d183a4\"},\"description\":\"How this gateway is stacking up against the competition, according to the latest office data from CommercialEdge.\",\"breadcrumb\":{\"@id\":\"https:\/\/www.commercialsearch.com\/news\/phoenix-office-deal-volume-increases-construction-still-slow\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.commercialsearch.com\/news\/phoenix-office-deal-volume-increases-construction-still-slow\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.commercialsearch.com\/news\/phoenix-office-deal-volume-increases-construction-still-slow\/#primaryimage\",\"url\":\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2023\/12\/18695-North-Claret-Drive-Scottsdale-AZ-CAVASSON-img-1-e1702982674656.jpg\",\"contentUrl\":\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2023\/12\/18695-North-Claret-Drive-Scottsdale-AZ-CAVASSON-img-1-e1702982674656.jpg\",\"width\":1000,\"height\":750,\"caption\":\"18695 North Claret Drive, Scottsdale. Image courtesy of CommercialEdge\"},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/www.commercialsearch.com\/news\/phoenix-office-deal-volume-increases-construction-still-slow\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/www.commercialsearch.com\/news\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Phoenix Office Deal Volume Is Up, Construction Still Slow\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/www.commercialsearch.com\/news\/#website\",\"url\":\"https:\/\/www.commercialsearch.com\/news\/\",\"name\":\"Commercial Property Executive\",\"description\":\"\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/www.commercialsearch.com\/news\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en-US\"},{\"@type\":\"Person\",\"@id\":\"https:\/\/www.commercialsearch.com\/news\/#\/schema\/person\/4659e2337f06b61cefc6b0b897d183a4\",\"name\":\"Simona Tudose\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.commercialsearch.com\/news\/#\/schema\/person\/image\/\",\"url\":\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2023\/02\/SimonaTudose_AuthorPhoto.jpg?w=79\",\"contentUrl\":\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2023\/02\/SimonaTudose_AuthorPhoto.jpg?w=79\",\"caption\":\"Simona Tudose\"},\"description\":\"Simona Tudose is an Associate Editor with Commercial Property Executive and Multi-Housing News. She joined the CPE-MHN team in July 2022 and writes news about industrial, office and manufactured housing sectors. You can reach out to her at simona.tudose@cpe-mhn.com.\",\"url\":\"https:\/\/www.commercialsearch.com\/news\/author\/simona-tudose\/\"}]}<\/script>\n<!-- \/ Yoast SEO Premium plugin. -->","yoast_head_json":{"title":"Phoenix Office Deal Volume Is Up, Construction Still Slow - Commercial Property Executive","description":"How this gateway is stacking up against the competition, according to the latest office data from CommercialEdge.","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/www.commercialsearch.com\/news\/phoenix-office-deal-volume-increases-construction-still-slow\/","og_locale":"en_US","og_type":"article","og_title":"Phoenix Office Deal Volume Is Up, Construction Still Slow","og_description":"How this gateway is stacking up against the competition, according to the latest office data from CommercialEdge.","og_url":"https:\/\/www.commercialsearch.com\/news\/phoenix-office-deal-volume-increases-construction-still-slow\/","og_site_name":"Commercial Property Executive","article_publisher":"https:\/\/www.facebook.com\/CPExecutive","article_published_time":"2024-01-10T14:19:55+00:00","article_modified_time":"2024-07-25T11:53:42+00:00","og_image":[{"width":1000,"height":750,"url":"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2023\/12\/18695-North-Claret-Drive-Scottsdale-AZ-CAVASSON-img-1-e1702982674656.jpg","type":"image\/jpeg"}],"author":"Simona Tudose","twitter_card":"summary_large_image","twitter_creator":"@cpexecutive","twitter_site":"@cpexecutive","schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"WebPage","@id":"https:\/\/www.commercialsearch.com\/news\/phoenix-office-deal-volume-increases-construction-still-slow\/","url":"https:\/\/www.commercialsearch.com\/news\/phoenix-office-deal-volume-increases-construction-still-slow\/","name":"Phoenix Office Deal Volume Is Up, Construction Still Slow - Commercial Property Executive","isPartOf":{"@id":"https:\/\/www.commercialsearch.com\/news\/#website"},"primaryImageOfPage":{"@id":"https:\/\/www.commercialsearch.com\/news\/phoenix-office-deal-volume-increases-construction-still-slow\/#primaryimage"},"image":{"@id":"https:\/\/www.commercialsearch.com\/news\/phoenix-office-deal-volume-increases-construction-still-slow\/#primaryimage"},"thumbnailUrl":"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2023\/12\/18695-North-Claret-Drive-Scottsdale-AZ-CAVASSON-img-1-e1702982674656.jpg","datePublished":"2024-01-10T14:19:55+00:00","dateModified":"2024-07-25T11:53:42+00:00","author":{"@id":"https:\/\/www.commercialsearch.com\/news\/#\/schema\/person\/4659e2337f06b61cefc6b0b897d183a4"},"description":"How this gateway is stacking up against the competition, according to the latest office data from CommercialEdge.","breadcrumb":{"@id":"https:\/\/www.commercialsearch.com\/news\/phoenix-office-deal-volume-increases-construction-still-slow\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/www.commercialsearch.com\/news\/phoenix-office-deal-volume-increases-construction-still-slow\/"]}]},{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.commercialsearch.com\/news\/phoenix-office-deal-volume-increases-construction-still-slow\/#primaryimage","url":"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2023\/12\/18695-North-Claret-Drive-Scottsdale-AZ-CAVASSON-img-1-e1702982674656.jpg","contentUrl":"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2023\/12\/18695-North-Claret-Drive-Scottsdale-AZ-CAVASSON-img-1-e1702982674656.jpg","width":1000,"height":750,"caption":"18695 North Claret Drive, Scottsdale. Image courtesy of CommercialEdge"},{"@type":"BreadcrumbList","@id":"https:\/\/www.commercialsearch.com\/news\/phoenix-office-deal-volume-increases-construction-still-slow\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/www.commercialsearch.com\/news\/"},{"@type":"ListItem","position":2,"name":"Phoenix Office Deal Volume Is Up, Construction Still Slow"}]},{"@type":"WebSite","@id":"https:\/\/www.commercialsearch.com\/news\/#website","url":"https:\/\/www.commercialsearch.com\/news\/","name":"Commercial Property Executive","description":"","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/www.commercialsearch.com\/news\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-US"},{"@type":"Person","@id":"https:\/\/www.commercialsearch.com\/news\/#\/schema\/person\/4659e2337f06b61cefc6b0b897d183a4","name":"Simona Tudose","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.commercialsearch.com\/news\/#\/schema\/person\/image\/","url":"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2023\/02\/SimonaTudose_AuthorPhoto.jpg?w=79","contentUrl":"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2023\/02\/SimonaTudose_AuthorPhoto.jpg?w=79","caption":"Simona Tudose"},"description":"Simona Tudose is an Associate Editor with Commercial Property Executive and Multi-Housing News. She joined the CPE-MHN team in July 2022 and writes news about industrial, office and manufactured housing sectors. You can reach out to her at simona.tudose@cpe-mhn.com.","url":"https:\/\/www.commercialsearch.com\/news\/author\/simona-tudose\/"}]}},"jetpack_featured_media_url":"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2023\/12\/18695-North-Claret-Drive-Scottsdale-AZ-CAVASSON-img-1-e1702982674656.jpg","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/posts\/1004694540","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/users\/2991"}],"replies":[{"embeddable":true,"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/comments?post=1004694540"}],"version-history":[{"count":10,"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/posts\/1004694540\/revisions"}],"predecessor-version":[{"id":1004697626,"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/posts\/1004694540\/revisions\/1004697626"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/media\/1004694604"}],"wp:attachment":[{"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/media?parent=1004694540"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/categories?post=1004694540"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/tags?post=1004694540"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}