The Phoenix office market continues to navigate through an extended period of demand disruption, as evidenced by roughly -1 million SF in negative net absorption during 23Q2. The subdued construction pipeline has prevented a further supply and demand imbalance. About 1.0 million SF of net deliveries were finalized over the past 12 months and just 1.2 million SF is currently underway.

High-quality properties with strong tenants on long-term leases will still receive considerable attention. Medical offices are also sought after, as the aging population generates heightened healthcare demand. The West Valley in particular has a concentration of medical office space to serve the retirement populations in Surprise, Sun City, and Peoria. Read more about the forecast of the Office and Office Condo Markets below!