Office Absorption to Drag Through Mid-Year

PHOENIX-End-of-2012 uncertainty in our nation’s capital is expected to place a sizeable drag on office leasing activity and subsequently net absorption here through mid-year 2013, according to Matt Kolano, a research analyst on the Phoenix market from Jones Lang LaSalle. This drag is exacerbated by weak leasing activity seen in late 2012, as well, he adds.

Fiscal-cliff concerns, which dominated business decisions during the second half of 2012, became more pronounced as the year wore on and as we approached 2013 with no deal in sight, Kolano says. But surprisingly, it didn’t negatively impact local employment activity. “This should have ground local hiring to a halt, but surprisingly job creation in the greater Phoenix MSA didn’t slow a bit. Companies continued to hire local talent in droves—between August and October, the local economy added 60,000 jobs.”