Colliers International 2020 Q1 Greater Phoenix Medical Office Market Report

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Q1 2020 Medical Office Market

Forecasts from last quarter predicted that Q1 2020 would be extremely healthy in every CRE product type.

  • First quarter medical office posted 24,349 square feet of market wide positive net absorption.
  • Midtown/Central Phoenix, Mesa East, Arrowhead and Deer Valley submarkets each showed strong positive absorption levels.
  • During 1Q 2020, an additional 78,817 square feet was completed, over 20 percent of the delivery level for all of 2019.
  • The market currently has 854,197 square feet under construction.
  • Vacancy settled at 14.5 percent, 10 bps higher over the quarter.
  • Rental rents increased 1.5 percent during first quarter, and 3.4 percent year-over-year, settling at $21.42 per square foot.
  • Investment sales volume settled at $67 million during first quarter
  • Median price per square foot declined from the previous quarter of $205, to the current $167 per square foot.

Updated employment figures from Bureau of Labor and Statistics revealed Maricopa County added over 89,000 new jobs to the market in 2019. Maricopa County became #1 in the nation for jobs added.

As of February, the Phoenix MSA had an unemployment rate of just 3.9 percent, 10 bps lower than the month previous, and 30 bps lower than a year ago. Total Non-Farm Employment was up 3.36 percent over the year from February of 2019. All these present clear signs of a healthy economy, which fuels the commercial real estate market.

Outlook: The forecast for the medical office market remains largely favorable. Healthcare is expected to be one of few industry sectors that will gain jobs from the pandemic. Pent-up demand from the cancellation of procedures, will result in countless medical practices working tirelessly to meet the needs of their patients.

The current economic situation will also create new demand, as policy changes could potentially alter space and size demands of medical practices. We currently have a shortage of physicians in the Valley to accommodate the fast-growing population. There will be a small period of price confusion after we open the economy and the market shifts to discover where it is positioned.

In the midst of the COVID-19 outbreak, information and data is emerging at a quick and uneven rate. The information contained herein has been obtained from sources deemed reliable at the time the report was written. While every reasonable effort has been made to ensure its accuracy, we cannot guarantee it. No responsibility is assumed for any inaccuracies. Readers are encouraged to consult their professional advisors prior to acting on any of the material contained in this report.

Medical Office Market Colliers International in Arizona

Colliers International 2020 Q1 Greater Phoenix Medical Office Market Report

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Phillip Hernandez

Research Manager


As research manager for Colliers International in Arizona, I am responsible for proactively developing and implementing research objectives and directing all research activity for the Arizona offices.

I provide leading-edge, thought-provoking research and analysis of market data for use in producing quarterly statistical market reports for each property discipline, as well as other ad hoc reports, research projects and presentations. I analyze and interpret real estate trends and maintain a database of economic indicators to provide forecasts.

Regardless of the property type or sector, I believe each has a story to tell and that data provides the opportunity to redefine the narrative. With a background in location analytics, I am highly experienced in interpreting complex data sets. Using the latest technology, I developed a system to blend analytics with a visually attractive approach to bring data to life.

Focusing on business development, I leverage market intelligence and insights for thought leadership content strategy in support of client engagement. My goal is to strategically align research and business development efforts and present research in an easily digestible format that promotes Colliers’ market share and revenue growth.

Colleagues describe me as a brilliant storyteller and a passionate, creative and experienced professional.

Prior to joining Colliers, I served as a business analyst at CBRE, where I specialized in creating tailored research reports, as well as unique and interactive applications and dashboards that elevated the market position of assets.

I delivered weekly research updates with relevant lease and sale comps, custom competitive sets and current market activity. I provided complex market and trend analyses, monitored an extensive database of proprietary market data, and delivered custom quarterly and annual reports that were strategically positioned towards targeted clients. I also led weekly department research meetings to develop initiatives surrounding market trends, produce innovative industry solutions and analyze client-centric objectives.

Previously, I was a GIS analyst for the central region of CBRE. Working exclusively with top-performing markets, I created unique models that illustrated custom real estate datasets through location analytics. I produced high-quality geographic and demographic maps, and investigated multiple approaches to storytelling through map and market analytics.

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Casey Koziol



As a research analyst for Colliers International in Arizona, I deliver in-depth analysis of current market conditions and trends for brokerage professionals and their clients. I compile market statistics across all property disciplines, including industrial, office, retail, healthcare, multifamily and land.

Using various in-house and online resources, I prepare data and background narrative information for market reports, publications and proposals for use by brokers, staff and management to serve the interests of Colliers’ clients.

In support of sales, leasing and business development, I create compelling client-facing presentations that illustrate and interpret real estate and economic trends. I track and analyze all aspects of the commercial real estate market and leverage that knowledge on behalf of Colliers and its clients. I also maintain sales and lease comp databases, monitor tenants-in-the-market activity, and respond to ad hoc research requests.

Clients and colleagues describe me as an ambitious and results-oriented professional, who strives for service excellence. My commitment to integrity, collaborative approach and effective communications make me a valued partner to internal and external clients.

My background includes working with landlord and tenant clients, primarily in the industrial and education sectors. Prior to joining Colliers, I served as a real estate sales and acquisitions intern at Tucson Realty & Trust Company, where I specialized in identifying potential buyers and sellers for commercial properties in the Tucson metropolitan area. Accomplishments included locating a buyer for an industrial storage property in south Tucson and facilitating a 1031 exchange on behalf of a client.

I was also a marketing analyst intern for Keyser Commercial Real Estate in Scottsdale, where I supported business developments efforts thorough researching properties on CoStar for existing and potential clients for the tenant-focused firm.

Outside work, my interests and activities include international travel, professional and collegiate sports, open water diving (I am scuba certified) and a variety of adventure challenges. I am semi-fluent in written and spoken Spanish, after spending a semester in Spain.

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