Only One Western Market Bests Phoenix Occupancy Growth

Hornaday says Phoenix is posed for occupancy gains and average asking rates.

PHOENIX—The Metro Phoenix office market posted the largest midyear net gain since 2006, with slightly more than 1 million square feet during the second quarter 2016, according to Cushman & Wakefield. At the 2016 midyear point, office vacancy in the Metro Phoenix office market stood at 18%, a 20 basis-point reduction from first quarter 2016, and an even more significant drop of 130 basis points from the 19.3% reading of second quarter 2015.

“The Metro Phoenix job market continued to show signs of improvement, adding just over 62,000 jobs year-over-year through May 2016,” says Curtis Hornaday, associate market director of research with Cushman & Wakefield.  “Out of the 62,000 jobs added, nearly 40% were office sector jobs. Over the past five years, the Phoenix office sector has outperformed state and national averages by virtue of favorable demographics and being viewed as a much cheaper technology hub when compared to California.”