Renaissance Square comprises of two office towers and retail space in downtown Phoenix near Central Avenue and Adams Street. (Photo courtesy of Hines)
Phoenix office market on pace to surpass 2 million SF of absorption
For the fourth year in a row, the Phoenix office market is on pace to surpass 2 million square feet of absorption, according to the Q2 Phoenix Office Insight Report released today by the Phoenix office of JLL.
According to the report, second quarter absorption totaled 595,346 square feet, representing the Valley’s 16th consecutive month of positive net office space absorption.
Construction also ramped up in the second quarter, with five new office projects breaking ground totaling 638,090 square feet. This includes the Camelback Collective, a 3.62-acre mixed-use office and hotel project representing the first new construction in the prominent Camelback Corridor since 2010. It also includes the first new construction in downtown Phoenix since 2010 (not counting re-development in the Warehouse District) with Block 23, another mixed-use project, scheduled to break ground in August 2017.
“Tenants today are looking for more than quality office space. They want walkable amenities in live, work, play environments that enable them to attract and retain caliber talent,” said JLL Managing Director John Bonnell. “Developers have recognized this and are building to meet those demands.”
Block 23 and Camelback Collective are two of the newest projects under construction that were specifically designed to speak to those needs.
“The Camelback Corridor has always been a hotspot for traditional tenants looking to upgrade their image or improve their location, and Camelback Collective will help fill that demand,” said Bonnell. “The resurgence of downtown is doing the same for a variety of companies, including technology groups that had previously focused only on downtown Tempe or South Scottsdale. Companies moving from larger cities like San Francisco and Chicago like the feel of a 24/7 downtown environment, and prefer it over suburban locations.”