Q2 2026 Phoenix Office Market Update
The Q2 2026 Phoenix office market continued its recovery, with steady leasing activity and improving vacancy across the metro. Conditions are now moving closer to pre-pandemic levels. Tenant demand continues to favor high-quality, amenity-rich properties and move-in-ready spaces. This is especially true in the Camelback Corridor, Scottsdale, and Tempe, where well-located buildings are outperforming the broader market.
Limited new construction is also helping the recovery. Developers have pulled back on ground-up office projects, which is keeping new supply in check. At the same time, owners are redeveloping obsolete office inventory into other uses, further reducing excess space on the market. Together, these trends are tightening the supply-demand balance across metro Phoenix.
The investment side of the Phoenix office market is showing renewed activity as well. Office sales totaled $2.3 billion over the past 12 months, a sign that investor confidence is returning to the sector. Average asking rents increased 1.5% year over year, reflecting steady, if modest, upward pressure on pricing.
Still, the recovery remains uneven. There are significant differences in vacancy, rents, absorption, and pricing across Phoenix-area submarkets. Some areas are seeing strong tenant demand and rising rents, while others continue to work through elevated vacancy and softer pricing. Understanding these submarket-level differences is key for owners, tenants, and investors making decisions in today’s market.
Explore the Q2 2026 Phoenix Office Newsletter below for the latest market trends and submarket data. The full report also covers office and medical transactions and office condo activity shaping metro Phoenix this quarter.
For a deeper dive into the evolving dynamics of the Phoenix office market, including detailed projections and expert analysis, view the full newsletter below. You can download and share it for additional insights.
