Phoenix Office Absorption Highest in a Decade

The Phoenix market continues its growth spurt. It’s latest record: office absorption. In the first quarter, Phoenix recorded 1.05 million square feet of total office absorption with new leases accounting for 900,000 square feet of leasing activity, according to a local market report from JLL. This is a 10-year record for office absorption for the market. Phoenix has been rapidly growing, thanks to an expanding economy, educated talent pools and low cost of living.

“Phoenix has one of the lowest costs of doing business than any other U.S. metropolitan area at 3.8%, lower than the baseline average,” Jennifer Farino, research analyst at JLL Phoenix, tells GlobeSt.com. “This has companies looking to Phoenix as an alternative location that avoids some of the higher costs in cities that line the West Coast. As a result, the Phoenix office market is developing a solid and more diverse tenant base, with unemployment rates low and consumer confidence high throughout the Valley. These are all factors that bode well for sustainable office demand.”

Chandler-Gilbert and Tempe are the most in-demand office submarkets. Of the six top office deals signed in the first quarter, five of them were in one of these two markets, while the sixth was in the Camelback Corridor. These markets are also home to the fastest growing markets, including technology companies and there central location make them ideal for many companies coming to the market.