Phoenix Still Seeing Record Office Sublease Availability

Credit: timeout.com

By Kidder Mathews and AZBEX Staff 

Kidder Mathews, in its recent Phoenix Office CRE Market Update for Q2 2021, reported the Phoenix office market continues to see record office sublease availability. 

Rental rates also reached a record high in the Second Quarter, hitting $28.08/SF on a full-service basis. Year-over-Year sales transactions hit 2.6MSF, more than doubling over the period. 

The report notes lease volume also improved YoY and over the quarter, even though demands remained weak when compared to pre-pandemic levels.  

Even though the construction pace has slowed, the pipeline has still delivered record volumes YoY. Even though the supply delivered this year will outpace demand, the slower pace should mitigate the risk of significant vacancy increases.  

The report notes uncertainty still remains over the long-term impacts on office space use post-pandemic, but finds cause for optimism given the increases in vaccine delivery and the gradual return to office work in many firms. (Source) 

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