According to Market Trend report from Costar, the Phoenix industrial market and office market vacancy rates are on the decline. That is a good thing! A summary breakdown of Phoenix vacancy rates trending into 2017 are as follows:
- The Phoenix Industrial market ended the third quarter with a vacancy rate of 10.3% which was down over the previous quarter with net absorption totally positive 1,283,439 square feet. The vacancy rate was 10.4% at the end of the 2nd quarter, 10.5% at the end of the 1st quarter and 10.3% at the end of the 4th quarter in 2015. The average quoted asking rental rate for industrial space was $6.91 SF per year at the end of 3rd quarter.
- The Phoenix Office market vacancy rate is also on the decline ending the third quarter with a vacancy rate of 15.4% with a net absorption total of 1,053,043 sf. The Office vacancy rate was 15.8% at the end of the second quarter, 16.3% at the end of the 1st quarter and 16.2% the end of the 4th Quarter 2015. The average quoted asking rental rate for office space was $23.10 SF Per year at the end of the 3rd quarter
With office and industrial vacancy rates improving, landlords are raising rents on the higher quality spaces with likely gains in 2017. In addition, as unemployment rates also continue to decline, employers needing office and industrial space will have the greatest effect on the vacancy rate.