There are many positive things on the horizon for Arizona. Many of the Covid-19 restrictions have been lifted and large numbers of people have been vaccinated. After years of the pandemic, businesses have a new confidence. They are considering bringing back their employees and looking at long-term office leasing again. Things are looking up on many levels. According to the Costar Marketing analysis, quarterly leasing volume in 21Q2 has reached pre-pandemic numbers. Other employers have retained a remote workforce, no longer needing office space which has caused an increased activity in sub-leasing which according to Costar is at a record-high.
In the Industrial submarket, the Scottsdale Airpark has improved. During the pandemic, there was a temporary rise in vacancies due to tenants moving out and moving on. According to Costar, the vacancy rate has lowered substantially for Industrial rates. Out of state companies are moving to Arizona and there is limited supply of space.
Below are the top 4 commercial real estate changes in Scottsdale, Arizona according to Costar Market Trends :
- SUBLEASE OFFICE SPACE: Available sublease space has grown from ±260,000 SF in 2019 4th Quarter to ±700,000 SF. The conditions are favorable for tenants with the increase of available space and discounted rents. In the valley, the Scottsdale Airpark is considered a primary office area having a large office inventory (more than 13 million SF).
- OFFICE VACANCY – Office vacancy rate in 2020 was ±14.1% and increased to ±15.9% in 2021.
- INDUSTRIAL VACANCY – Industrial vacancy rate in 2020 was ±5.8% and decreased to 4.0% in 2022 (-1.7%).
- Forecast for Office in 2022 is ±15.4% a decrease of (-0.5%) Forecast for Industrial in 2022 is ±4.4% an increase of (0.4%)