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PHOENIX-A mere fraction of the millions of square feet of the office sublease space that’s available for sublease has been taken off the market, with McCullough Mortgage inking a lease in the Camelback Corridor.

McCullough Mortgage has subleased more than 14,500 sf in the Biltmore Lakes, a 207,000-sf, class A office building at 29th Street and Camelback Road. McCullough Mortgage reportedly leased the space significantly below market rate. Class A office space along the Camelback Corridor typically leases for between $27 per sf and $30 per sf.

North American Mortgage leased the space to McCullough Mortgage. The new tenant will use the office space for its residential mortgage business.

The Valley’s overall vacancy rate officially is 15.2%, according to a recent survey by Grubb & Ellis Co. But millions of square feet of “shadow space,” vacant space that’s available for lease, doesn’t show up in the survey. That additional space brings the overall vacancy rate closer to 18%.

The Biltmore Lakes office is located along the Camelback Corridor, one of the most coveted office addresses in the Valley. The slowdown in the national economy has hit the popular submarket, with had nearly 80,000 sf of negative absorption in the second quarter. Year to date, the area’s negative absorption totals about 117,000 sf for the office market. The vacancy rate along the Camelback Corridor is 12.3%.

Tyler Smith of the Phoenix office of Grubb & Ellis represented McCullough. Mark Sealeand and Jen Bishop, both of CB Richard Ellis’ Phoenix office, acted for North American Mortgage.

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