By Karen Schutte for Real Estate Daily News
Colliers International is reporting that after a fairly steady first half of the year, the Greater Phoenix office market strengthened in the third quarter.
Tenants moved into a net of more than 950KSF in the past three months, topping the total for the first half of the year and marking the strongest single quarter of net absorption in Greater Phoenix in two years. This renewed tenant demand is forecast to continue in the coming months.
This tenant demand for space is also supporting rent growth in the market.
Rents have been on the rise for more than two years, and the pace of growth is accelerating as market conditions tighten. Rents are also receiving a boost from the delivery of new, expensive space in many high-demand submarkets.
One indicator of the strengthening in the local office market is the improvement being recorded in a greater number of submarkets.
Development of new office buildings is on the rise, with approximately 2.5MSF expected to come online in 2015. The new construction includes a mix of spec and build-to-suit projects.
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