Office vacancies lowest since 2007: What’s the difference now?

By Mike Sunnucks | Rose Law Group Reporter

The office vacancy rate in Phoenix is 16.1 percent. Craig Coppola, a founding principal with Lee & Associates Commercial Real Estate Services, said the last time office vacancies were at the level was 2007 when the market and economy crashed.

“It took us 12 years to get back to the same vacancy. It was a long touch road back, but we are finally there. However, this time around there are some big differences comparing 2007 and 2019,” Coppola said.

Coppola said those difference include average rents which were $1.50 per square foot higher in 2009. He said operating expenses and costs for landlords are $1.56 per square foot higher. That means owners can be netting $3 per square foot less now than in 2007.

Coppola said in his research analysis there is less than 3 million square feet of office space currently delivering in the Phoenix market. That compares to 9 million square feet in the office pipeline in 2007.

“We are not overbuilding this cycle as our absorption should match up close to deliveries and buildings under construction,” Coppola said.

The commercial real estate executive expects the office vacancy rate to continue to go down into the 15 percent range but he does not expect to go below that in 2020 with the presidential election looming.

Share this!

Additional Articles

News Categories

Get Our Twice Weekly Newsletter!

* indicates required

Rose Law Group pc values “outrageous client service.” We pride ourselves on hyper-responsiveness to our clients’ needs and an extraordinary record of success in achieving our clients’ goals. We know we get results and our list of outstanding clients speaks to the quality of our work.

Court Rich, Rose Law group co-founder, Director of Renewable Energy & Utility Infrastructure, celebrates 20 years of sustainability in the legal field

By InBusiness Phoenix Court Rich, Co-Founder of Rose Law Group pc, is celebrating twenty years since joining the firm. Under Court’s guidance, Rose Law Group has become a leading firm for renewable energy and regulatory law in the Southwest. When Court joined in 2004, the firm had just two attorneys. Today, it boasts a

Read More »
November 2019