Above: Taiwan Semiconductor Manufacturing Company signed a 46,735-square-foot office lease at the Canyon Corporate Plaza office campus in Phoenix.
By AZRE | AZ Big Media
Impact of the COVID-19 pandemic has clearly arrived in Phoenix office market statistics for fourth quarter 2020, according to a Colliers International report. The city had its first quarter of negative net absorption in more than eight years. Yet, the outlook is optimistic for a swift recovery in 2021 and 2022 as companies can safely bring employees back to work for much-needed interaction and career development.
The Greater Phoenix office market posted 143,434 square feet of negative net absorption during the final three months of 2020. This followed an astonishing run of 34 consecutive quarters of positive net absorption. This negative net absorption is directly attributed to companies exploring the idea of entirely working from home, subleasing a portion or all of their space. Office tenant strategies ranged from signing long, 10-year leases to lock in rates to signing short-term leases as a method to “buy time” and ride out the pandemic. Despite these unprecedented actions in the market, Greater Phoenix posted positive net absorption for 2020 of 582,121 square feet. Sublease availability decreased slightly at the end of the year, following a peak in third quarter. However, year-over-year sublease space is up 91 percent.