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SCOTTSDALE, AZ-With 761,843 sf of absorption year to date and a vacancy rate of 13.8%, the Scottsdale Airpark and Central Scottsdale submarkets are leaving the rest of the Valley in the dust, according to third quarter numbers from Cushman & Wakefield of Arizona Inc.

Scottsdale Airpark and Central Scottsdale accounted for 85% of the absorption in Phoenix’s 17 suburban submarkets. The submarkets account for nine million sf of office space out of the metro’s 63.4-million-sf inventory, which ended the quarter with a 19.3% vacancy.

According to Jim Wentworth, senior managing director in Phoenix for Cushman & Wakefield, the strongest leasing activity has been in the suburban markets, particularly Scottsdale. In the past three months, the strongest absorption, 245,107 sf, was recorded in the Scottsdale Airpark submarket. Wentworth credits more than half of the submarket’s absorption last quarter to Pulte Homes’ new 150,000-sf facility at Raintree Corporate Center. Meanwhile, another 112,649 sf of absorption occurred in the Central Scottsdale submarket. Citywide, absorption was 793,518 sf at the third-quarter close.

Most of the new construction in the Valley is concentrated in Scottsdale. In the Scottsdale Airpark submarket, nearly 400,000 sf of office space has been completed this year. Another 136,000 sf is under construction in the submarket.

Three Scottsdale submarkets account for 50% of the proposed office development: an additional 1.1 million sf is set to rise in Scottsdale Airpark; 530,000 sf is ticketed for Scottsdale Ranches; and 337,613 sf will come out of the ground in Central Scottsdale.

According to Cushman & Wakefield, the highest price for office space continues to be found in the Scottsdale Airpark and Scottsdale Ranches submarkets. The airpark is fetching $23.49 per sf, on average, and Scottsdale Ranches, $23.43 per sf.

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