Vacancy in the Greater Phoenix office market ended the second quarter at 17.9 percent, identical to the first quarter figure and 80 basis points lower than one year ago. The Class A segment of the market is recording the strongest vacancy declines.
Net absorption accelerated in the second quarter, totaling 530,000 square feet. Over the past 12 months, net absorption in the market has reached nearly 2.2 million square feet.
Asking rents are on the rise, gaining 1.1 percent in the second quarter to $21.51 per square foot. Current asking rents are 3.7 percent higher than one year ago and forecasts call for a 2015 gain of approximately 4.5 percent.
Development activity continues to gain momentum. In the past 12 months, more than 1.6 million square feet of space has been delivered, up from 882,000 square feet in the preceding 12-month period.
Sales of office buildings dipped slightly in the second quarter, with the greatest decline recorded in deals of $25 million or more. While fewer properties are changing hands, the buildings that are selling are yielding higher prices. The median price in sales transactions during the second quarter was $152 per square foot, up from a median of $111 per square foot in the first quarter.
View Colliers International’s 2Q Phoenix Office Report
