Phoenix Office Investors Should be More Active with Appetite for Quality Assets

Although some cities are slow to bounce back with office activity, Phoenix does not fit into that category. With limited COVID restrictions, an influx of new businesses expanding or locating to the Phoenix market and a low unemployment rate of 3.2 percent at the end of fourth quarter 2021, the office market is improving, according to David Genovese, principal and managing director – Phoenix, Avison Young.

“Office vacancy is just under 17 percent and we saw rent growth of 1.8 percent in 2021, which is reassuring to office investors,” says Genovese. “Investment demand strengthened in 2021 with volume totaling $2.1 billion, up from $1.7 billion in 2020. We expect investors to be even more active in 2022 with an appetite for quality assets. While firms are still navigating the pandemic and return to office policies, we expect more office occupiers to commit to longer term leases as 2022 progresses.”

Metro Phoenix is the fifth-largest city in the country and continues to lead population growth nationally. “We are confident that Phoenix is well-poised to be in demand in 2022 and the rest of the decade,” he says.