Phoenix Office Survey Still Indicates Headwinds

Net absorption is down, as is office transaction volume. A recent 4Q Avison Young Office Market Report says it’s due to workers working remotely since the Covid scare, and businesses bracing for a wave of layoffs due to a balky economy. In spite of that, Phoenix has outperformed national benchmarks on many statistics relating to strength and resilience of economy. The national unemployment rate currently stands at 3.7%, while Phoenix’s unemployment rate closed the year at 3.0%.

Avison Young’s Mark Seale added this, “The office market continues to search for its footing at the end of 2022 as companies right-size their space usage. The flight to quality has never been more apparent as employers look to entice employees back to work by offering amenity-rich work experiences in the best buildings and locations. Rental rates are finally starting to move lower in some of the less than top quality properties.”