Colliers International 2020 Q3 Greater Phoenix Medical Office Market Report

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Q3 2020 Medical Office Market

The medical office market added 106,000 square feet of inventory in the third quarter, with high vacancy of 47% within three projects, focused primarily in the Glendale and Deer Valley submarkets.

  • Net absorption remained positive, ending at 87,913 square feet, marking the third consecutive quarter of positive net absorption
  • Vacancy settled at 13.7%, 100 bps higher year-over-year and 30 bps higher over-the-quarter
  • An increase in available sublease space was witnessed throughout metro Phoenix, increasing 17% since the previous quarter and 164% year-over-year. However, the total amount of sublease space remains less than 1.3% of the entire MOB inventory
  • Central Scottsdale took the largest hit, increasing 215% over-the-quarter and making sublease space 4.7% of the entire submarket’s inventory
  • Investment sales volume drastically increased 250% over-the-quarter but decreased 15% over-the-year to $40 million
  • The median price per square foot increased 52% over-the-quarter to the current $160. This increase was heavily driven by the $27 million sale of Scottsdale Gateway I, a 107,049-square-foot building in central Scottsdale that is home to Honor Health, Matrix Medical and SimonMed
  • Rental rates managed to increase 1.4% over-the-quarter and 3.8% year-over-year, settling at $21.90 per square foot
Outlook: The forecast for the medical office market remains extremely favorable for the remainder of 2020. The healthcare industry is rebounding very quickly with employment close to pre-pandemic levels. Leasing activity will pick up slowly because of the uncertainty of companies.

As we begin to see the workforce strongly push for a return to the office, this will improve trust and momentum in activity. Investor sales will continue moving forward, encouraging a strong recovery as the demand to be in the Phoenix market continues to gain strength.

According to a local generic drug manufacturer, Phoenix is in a prime position with plenty of opportunity to attract Life Sciences companies. These companies are primarily located in the high tax areas of California and New Jersey and may be looking to improve their business environment.

The upcoming election has placed Phoenix in the spotlight and positioned us as the nation’s top market for political advertising spending. At a local level, there are state propositions that could impact our economy and image as a pro-business city.

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 Q3 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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