Phoenix Office Market Shows Strength

The Greater Phoenix office market continues to see strong leasing and a decline in total inventory as obsolete buildings are repurposed. A recent report from Colliers documenting the first quarter 2026 shows positive net absorption for a second consecutive quarter. 

The Phoenix market is experiencing tremendous economic growth from manufacturing and technology, which is now spilling over into the office market. Strong leasing activity, helped first quarter post the second strongest net absorption in nearly four years. First quarter net absorption reached 432,379 square feet.

Direct vacancy dropped 60 basis points over the quarter to 14.5 percent. This was influenced by the removal of nearly 1 million square feet of inventory. Class A properties saw a 40 basis point decline in vacancy to 19.1 percent. Total inventory of office space has been declining, as developers move forward with re-purposing obsolete office buildings to meet market needs. Three buildings traded in the first quarter 2026 to developers planning new usage.