Courtesy of Cassidy Turley Research Team
Metro Phoenix is third in the nation for office demand during the third quarter with more than 1 MSF of net absorption.
• Metro Phoenix ranked 3rd in the Nation for overall office demand during the last quarter with net absorption of 1,008,933 square feet. The only two markets that were higher were Houston with 1.7 million square feet and New York with 1.3 million square feet of net absorption.
• Net absorption during the 3rd quarter was the second largest quarterly gain since 2006.
• Two speculative office buildings started construction during the third quarter: SkySong III in the South Scottsdale submarket (approximately 75% preleased) and Park Place Central – 1360 S. Spectrum Blvd. in the Chandler/Gilbert submarket.
Since the end of the “Great Recession”, metro Phoenix office market has experienced lackluster growth. Average annual net absorption for 2011 and 2012 was 1.2 million square feet. To draw a parallel to the 2001 recession, demand for office space in Phoenix was weak in the first three years of the recovery (averaging 1.7 million square feet of annual net absorption), and then the office sector took off in 2005, 2006, 2007 (averaging 2.8 million square feet of annual net absorption). Metro Phoenix office market is starting to reach similar years to 2005-2007.