Colliers International reports Phoenix office market remains strong

14,000 new jobs announced in 3rd quarter will fuel more demand for space

Phoenix, October 14, 2019 – Colliers International reports Greater Phoenix office market remained strong through third quarter 2019, and remains in the top five metro areas for job creation in the United States. Since July, more than 14,000 new jobs have been announced, which will fuel demand and development of more office space.

Third quarter 2019 was the second strongest quarter for absorption since 2015. Nearly 1 million square feet of net absorption occurred during the third quarter, bringing the year-to-date total of net absorption to 1.9 million. This marks the 30th consecutive quarter of positive net absorption.

Colliers predicts this pace will result in approximately 2.6 million square feet of net absorption for 2019. Despite below levels posted in recent past years, this amount of absorption will maintain a robust market.

Tempe, Chandler and Deer Valley/Airport submarkets experienced the largest leases.  WageWorks took 150,000 square feet at the Union at Riverview campus on the Tempe/Mesa border.

Deloitte opened its first 100,000-square-foot tech center at The Commons at Rivulon and expanded its presence there by almost another 100,000 square feet. Deloitte is expected to hire an additional 900 employees, adding to the 2,500 previously announced. Finally, Cox Communications signed a lease for 31,000 square feet at the Loop 101 Business Center.

During 2019, employers have added more than 57,800 jobs. Year-over-year job growth monitored since January indicates an average of 3 percent for Greater Phoenix, nearly double the national average. Third quarter jobs were primarily created in the construction, manufacturing and education & health services.

The office vacancy rate remains below 14 percent, dropping 250 basis points since a year ago.
The metro’s robust office market is illustrated throughout all classes of property. Class A vacancy at 14.5 percent posted its eighth consecutive quarter below 15 percent. Class B vacancy declined during 2019 to 13.9 percent at the end of third quarter.

Vacancy is expected to creep higher by the end of this year as more projects come online with vacant space. Deliveries of new buildings are expected to hit 2.75 million square feet, the largest amount in one year since 2015 with 3.12 million square feet.

Rental rates are increasing in response to declining vacancy. Asking rents ended the third quarter at $24.04 per square foot, which is a 3 percent increase from one year ago. Asking rents rose 0.6 percent over third quarter and 2.9 percent year-over-year. Asking rents are expected to push higher for the remainder of 2019, but at a more moderate pace.

Greater Phoenix added 776,795 square feet of new space during third quarter. Deliveries have decreased over recent years, but the pipeline for new projects is robust. More than 2 million square feet is currently under construction, 60 percent of which is preleased.

Tempe and Downtown South submarkets lead the metro in construction. New construction starts have trended downward since fourth quarter 2018, but new job growth announcements may stimulate new projects.

Investment sales volume rose approximately 8 percent during third quarter to $756 million across 54 transactions. The median price per square foot decreased slightly to $168, with cap rates resting at 7.5 percent.

Real estate markets are expected to maintain current health conditions, especially in the wake of recent announcements from the Federal Reserve and negative interest rates in Europe. As such, demand for commercial real estate assets in the United States should continue to increase as investor need for cash flowing vehicles rises due, in large part, to aging demographics. 

About Colliers International
Colliers International (NASDAQ, TSX: CIGI) is a leading global real estate services and investment management company. With operations in 68 countries, our 14,000 enterprising people work collaboratively to provide expert advice and services to maximize the value of property for real estate occupiers, owners and investors. For more than 20 years, our experienced leadership team, owning more than 40% of our equity, have delivered industry-leading investment returns for shareholders. In 2018, corporate revenues were $2.8 billion ($3.3 billion including affiliates), with more than $26 billion of assets under management.

Learn more about how we accelerate success at, Twitter @Colliers and LinkedIn.

Colliers International in Arizona has served clients locally and globally for more than 35 years.

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Thomas Brophy

Research Director


As national director of multifamily research & analytics for the Cooke Multifamily Team with Colliers International, I am responsible for the aggregation, management and analysis of all market, and related, data sets.

I am committed to providing market-leading research services through the systematic deployment of custom, purpose-built software and analytic platforms for the creation of qualitative, not just quantitative, analysis.

In addition to publishing quarterly statistical reports for each market in which our clients operate, I maintain a database of both publicly available, and in-house built, leading economic/real estate indicators to provide forecasts and analyze and interpret real estate trends as they happen.

I also produce customized research reports on behalf of the team and clients, prepare market presentations and develop ad hoc research projects in support of business development.

My ethos: question different; for it is in asking better, more salient, questions that true market knowledge, and understanding is found. I am reminded of the words of T.S. Eliot who stated, “Where is the wisdom we have lost in knowledge? Where is the knowledge we have lost in information?”

In our new era of big data, we have reached peak data overload. Knowledge is a derivative of information; wisdom, knowledge’s ultimate abstract, can only be gained when tethered to, and guided by, past experience.

Data without context is like a light without a bulb, a market without a narrative or an explanation without a common reference point.

Data is but a guide to asking better questions; better questions lead to greater understanding, which, if deployed effectively and purposely, lead to better results.

Prior to my current role, I served as research director for Colliers International in Arizona, managing the research department entrusted with all market data and analysis activities. My creative outlook significantly enhanced research services for clients and brokers. Collaborating with other service lines and professionals, our research team provided extensive data compilation, including ownership, zoning, land use, property sales and demographics, and developed reliable statistical information.

My extensive experience includes collecting, analyzing and preparing market and economic data and research, as well as expertise in corporate communications, investor relations, strategic planning, brand management and public speaking.

Prior to Colliers, I was director of research for ABI Multifamily, where I developed market reports and research data used in marketing materials for ABI offices in Phoenix, Tucson, Sacramento and San Diego. I oversaw all data collection and reporting, wrote monthly market insight articles, and developed market podcasts.

As director of research and partner for Neighborhood Ventures (a multifamily investment firm), I collected, analyzed and wrote market data reports for use in investor presentations, offering materials and corporate communications. As principal with EPU Investments, I directed business and research operations for a multi-divisional investment company involved in single- and multifamily development and land services, including farming and water rights assessments and acquisitions.

Serving as an affordable housing specialist at Hendricks & Partners (now Berkadia), I provided assistance, research and guidance in creating the affordable housing division, and assisted brokers and clients in the acquisition and disposition of assets across the U.S.

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