Q3 2015 shows the Phoenix office market achieved record absorption numbers since the downturn and also achieved the best vacancy rate in years.
Total office absorption in Q3 2015 amounted to 1,205,508 square feet and the vacancy rate dropped to 16.7% of all Phoenix Office buildings. Considering that vacancy has been hovering around 20% for several years that is a welcome sight for office owners.
In addition to improvements in basic office metrics, developers are still wary of overdeveloping and the current number of square feet of new office is far below the historic quarterly average. Phoenix averages around 4,000,000 square feet of future office delivery space per year and the Q3 number is 2,500,000 only the second highest number since 2009. A low delivery of new supply most likely will keep basic metrics like absorption and vacancy improving far into the future.
The best year to date absorption areas for Phoenix include:
- Chandler with 448,107 sq. ft.,
- Airport Area with 157,381 sq. ft.,
- Deer Valley Airport with 147,438 sq. ft., and
- Camelback Corridor with 100,980 sq. ft.
The lowest vacancy rates in Phoenix include:
- Scottsdale South at 9.7%,
- Mesa Downtown at 10.9%,
- West I-10 at 11.3%, and
- 44th Street Corridor at 12.2%.
The best average lease rates in Phoenix include:
- Camelback Corridor at $26.76,
- Downtown Phoenix at $24.96,
- Scottsdale Airpark at $24.94
- Chandler #4 at $23.55.
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