{"id":1004751366,"date":"2025-04-17T03:15:05","date_gmt":"2025-04-17T11:15:05","guid":{"rendered":"https:\/\/www.commercialsearch.com\/news\/?p=1004751366"},"modified":"2025-04-21T10:27:41","modified_gmt":"2025-04-21T18:27:41","slug":"phoenix-office-market-shows-sluggish-activity","status":"publish","type":"post","link":"https:\/\/www.commercialsearch.com\/news\/phoenix-office-market-shows-sluggish-activity\/","title":{"rendered":"Phoenix Office Market Shows Sluggish Activity"},"content":{"rendered":"
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\"Rendering<\/a>
Rendering of Gilbert Spectrum’s Building 3, that will include 119,222 square feet of office space upon completion. Image courtesy of SunCap Property Group<\/em><\/figcaption><\/figure><\/div>\n\n\n

Phoenix’s office construction activity continued to remain slow, with developers starting construction on only three projects, according to CommercialEdge data. On par with national trends in construction costs, The Valley posted one of the smallest pipelines among peer markets.<\/p>\n\n\n\n

Similarly, only 17 office assets traded in the first two months of 2025, resulting in one of the lowest dollar volumes among major U.S. markets. With the properties that ranked in the top five deals comprising less than 100,000 square feet, the average sale price so far ranked below the national average of $177 per square foot.<\/p>\n\n\n\n

New supply crashes, construction activity slows<\/h2>\n\n\n\n

Since the start of 2025, construction starts in Phoenix comprised 170,521 square feet across three properties, while deliveries marked a 100 percent year-over-year decline as no other project came online, CommercialEdge data shows.<\/p>\n\n\n\n

As of February, the metro had 826,426 square feet of space under development, accounting for 0.6 percent of existing stock\u2014below the national figure of 0.7 percent and on par with Orlando. Among similar markets, Austin led the ranking with 3.7 percent, followed by San Diego (3.2 percent) and Nashville (2.6 percent). When adding projects in planning stages to the figure, Phoenix\u2019s share reached 2.2 percent, still below the national average of 2.6 percent but surpassing Houston and Atlanta’s 1.9 percent.<\/p>\n\n\n\n

The Valley\u2019s under-construction pipeline remained one of the smallest among high-volume secondary markets. The leader in this category was Austin, with 3.6 million square feet underway, while San Diego followed, with 3.2 million square feet.<\/p>\n\n\n\n