PHOENIX-Though the metro office market started out the year with somewhat positive absorption, the overall Q1 picture seems to be one of sluggishness. According to recently released figures from Jones Lang LaSalle's Phoenix office, total net absorption stood at 160,959 square feet, with overall vacancy standing at 24.3% out of an area-wide inventory of 29.9 million square feet.
JLL's overall report demonstrated signs of optimism, however, pointing out that a solid start in the first quarter reinforced expectations for a steady, if somewhat slow, office market recovery. However, the report notes that, as few as they are, construction deliveries could end up slowing commercial real estate recovery, as absorption continues to lag behind the new space coming to market.
In terms of leasing, two of the larger deals – Vangent Inc.'s 124,552 square feet at 8900 N. 22nd Ave. and Brookfield Relocation's 121,123-square-foot agreement at 16260 N. 71st Ave. – were renewals.
But this could change. The report points out that tenants are in the market seeking space. These include Vanguard and Rural Metro (seeking 150,000 square feet and 100,000 square feet, respectively, in the Scottsdale submarket) and the law firm of Lewis and Roca, which needs 90,000 square feet. Meanwhile, the estate planning firm of Morris, Hall & Kinghom is looking for 20,000 square feet.
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