For the office market, the latest trend is in spaces designed to be creative, collaborative and flexible. Newer developments emphasize flexible layouts, open spaces, upgraded common areas and amenities to create a more attractive work environment.
The highest office rental rates for Class A office space are still found in the downtowns of Phoenix, Scottsdale and Tempe.
Older iconic core assets like the Biltmore Center and the Esplanade are undergoing extensive renovations to bring it up to par with today’s market demands.
With low vacancy rates and high rental rates in the more “urban” live-work-play submarkets like Downtown Tempe and Old Town Scottsdale, some experts predict more tech users will chase quality suburban office options and make them fun places to work, especially when facing a renewal that could potentially raise their rates by 20 or more percent.
“Some of the tech companies that have landed here over the past three to seven years have brought about a reemergence of the suburban office market,” says Keith Lammersen, senior vice president at JLL. “I believe this will continue to be one of the biggest emerging trends of the new year.”
He sees a lot of redevelopment of office space from more traditional layouts to creative flexible space, which allows for easy scaling based on the tenant’s needs.
For less traditional tenants seeking office space like entrepreneurs, freelancers, startups and small businesses, a collaborative workspace — also called co-working or shared office space — can be a viable and affordable alternative.