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Vacancy Rates Down in Phoenix & Scottsdale

costar year end report - Office MarketAccording to Market Trend report from Costar, the Phoenix office market ended the fourth quarter 2016 with a vacancy rate of 15%. This is a decrease from the third quarter’s vacancy rate of 15.4%.  The vacancy rate was 15.8% at the end of the second quarter 2016 and 16.3 % at the end of the first quarter 2016.  The rates continue to decline in the submarkets as shown below:

 

 

  • South Scottsdale:  14.7%
  • Central Scottsdale:  11.3%
  • Scottsdale Airpark: 11.7%

The average rental rate (quoted) for office was  $23.38 SF in Phoenix at the end of the 4th quarter 2016 which was an increase of 1.3% from the 3rd Quarter ($23.09SF). The average rental rates also increased by the end of the 4th quarter 2016 in the Submarkets as listed below:

  • South Scottsdale $28.46
  • Central Scottsdale $23.71
  • Scottsdale Airpark $26.80

With office vacancy rates increasing, landlords are raising rents with probable gains in 2017.  As the economy strengthens and the unemployment rates continue to decline, the need for office space will continue to grow affecting future vacancy rates.

(Information cited from COSTAR Market Trends Year End Report)

 

 

 

 

 

 

 

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