Monthly Archives: September 2022
How is chaos in the construction industry impacting commercial real estate here in Phoenix? It seems there is a growing concern around the supply chain bottleneck faced by those in the commercial real estate industry. A dwindling labor force, shipping vessels unable to dock, and general chaos surrounding the construction industry are enough to make anyone worry about the future of large commercial projects.
To gain some more insightful information around the current state of the supply chain bottleneck, I sat down with the President at Bluewave Construction, J.J. Levenske. In our one-on-one interview, we discuss market cycles, total demand, and everything in between.
Hi J.J., thanks for sitting down with me to discuss the Supply Chain Bottleneck that most of us are facing in the Commercial Real Estate industry. Can you give us a run-down on what you are seeing in the market? Where are we at with labor, supply, projects, and materials?
First of all, the municipalities are woefully understaffed in the post-covid period because they can’t afford to compete with the rising pay scales. So all of the planning, building, and inspection departments don’t have enough people. The result is an even deeper backlog of plans, submittals, and the like that are resulting in extended delivery times to even get a permit.
I was talking with a developer the other day that is working with Phoenix, and it will be 1.5 years by the time they get their permit. That problem is valley wide and it’s not getting better until the paradigm changes. The only reprieve will be if the interest rates thwart some of the single-family home development (e.g., track builders). When that happens, then some of those resources will hopefully be used to supplement or augment the commercial and industrial backlog.
Do you have any thoughts on what state we are currently in, as far as the real estate market is concerned?
The consensus is that even if and when the residential market goes through a few micro-cycles in the Valley, the pent-up demand versus supply for the commercial and industrial markets is too great to be impacted severely by the interest rates or national economic cyclicality.
A great example of this is that electrical gear (SES’s) and transformers (mid to high voltage) are both over a year out from the time of any orders, so that means that any current project will be at least 1.5 years from this point moving forward; if you do that math alone then it becomes obvious that no matter what anyone wants or wishes, there will be this levelling out of delivery for all projects in the Valley.
On the surface, that’s bad, but it might actually help amortize the work and lack of skilled labor into a longer-term deliverable in commercial and industrial work. Said differently, instead of a 3-year boom, we might actually see something more like a 5+ year boom just because of the supply and demand issues coupled with the mass exodus of businesses from CA that want to set up shop on AZ – Just look into the current legislation passed in CA on development. It is in essence a moratorium on development and no right-minded business is going to tolerate that long term in CA.
Any other supply chain issues regarding materials we should be aware of?
On Grading/Paving Availability:
It’s still an issue getting good operators and equipment, but the bigger issue is on the asphalt side because of rationing of aggregates and oil that are essential for asphalt. It’s not as bad as concrete, but still an issue. Like every trade right now, no price guarantees can be given. A quote is only good for a week or so and Force Majeure is the new buzz word over the last 9 months. “Take it or leave it” is the new norm.
Still suffering from a lack of cement (one of the key elements in concrete) as well as trucks and drivers. With the pure mass of all the tilt-up projects and Intel/TSMC, the rest of the market has literally been squeezed out to mass rationing and double or triple prices from just 1-2 years ago. This continues to be one of the biggest problems and there is no relief in sight. Some of the pricing has stabilized a little bit, but the access is still in short supply.
On Wood Structure:
On the futures market, this is one area that might stabilize because of the slight retraction in the residential market. Locally however, it might not be that promising. The multi-family builders are gobbling up as much as they can because of that increased demand – with less people being able to qualify for loans due to the rise in interest rates, the demand for multi-family will only continue to grow even though everyone was expecting a leveling or bubble on multi-family. This isn’t likely to happen anytime soon unless rates come back down.
The other problem is that the Wood and CFS (cold formed steel – metal studs) companies have the ability to raise their prices or hold them high as long as the demand is still there. They pit themselves against each other in more of a collusion than competitive pricing. Why wouldn’t they if they know the demand is still there? It has stabilized a little bit price wise, but everyone that thinks there will be a major drop in either of these is naïve and blind to the obvious situation that wall street controls these commodities and they want the best return that the market will bear.
On Commercial Roofing:
Roofing has seen a bunch of demand increases, especially in EPS (expanded polystyrene) which is the base layer for most roofing systems before a TPO or EPDM goes over the top of them. This is the same kind of foam that the stucco or EIFS guys use on the cladding, so the demand just outstripped the supply in the COVID period, and those plants never caught up. This means supply is low and demand is high, especially with the millions of SF going into all the industrial tilt-up buildings for distribution and warehousing locally.
The other important part is that the metal roofing and components (which everyone forgets about – all the parapet caps, flashing, and misc. stuff that goes into a roofing system) has literally doubled like anything else in the metal or steel market.
This is the most critical element in the current market. Manufacturer doesn’t matter; the story is the same on 60 – 80-week delivery times. They aren’t even accepting expediting fees anymore. There are legitimate stories of hundreds of thousands of dollars to get expediting for single projects and they aren’t even acknowledging that anymore. As a result, they can get whatever price they want and it’s easily double or triple what it used to be. Without power, how can buildings open and produce revenue?!?
On Site Utilities:
The exact same situation as electrical.
We still have an issue with steel (especially bar joists and deck). The prices have stabilized somewhat because once the lead times were a year out then everyone started using composite methods to get roofing figured out. Steel was the earliest trade impacted during COVID, so literally all the other items above are following the same cycle as steel. The irony is that each solution just creates a new problem with whatever that product or supply chain hadn’t dealt with prior.
The main reason for this is that all supply chain companies and industries have never recovered from COVID or the new paradigm that is our workforce (or lack thereof). More offsite production, robots, and integrated delivery are the keys to the future. But the industry is slow to change, and ultimately capital will continue to drive that solution – they won’t tolerate anything less. Those willing to adapt and embrace that change will be on top from a Commercial Real Estate and Construction standpoint.
Finishing up, are you seeing demand slow down?
No, demand is not slowing down because of the key points I brought up earlier with the 1-to-1.5-year backlogs and influx from CA (and other states). We have too much going for us in AZ as the new Taiwan of the world. It is literally a double-edged sword of CHIPS and technology, coupled with the new era manufacturing model. Companies and people want the sun, year-round access to things (even though it’s hot), and a business-friendly environment which AZ has established and maintained thus far.
Looking to gain some more insight on the Commercial Real Estate market in Phoenix?
There is no denying the influx of demand we’re currently seeing in Phoenix. As a result of a rapidly growing business environment, and the right social infostructure to support it, Phoenix is likely to hold high-quality investment opportunities for years to come. ICRE Investment Team has partnered with the most prominent businesses, banks, construction companies, and investors to provide the most up-to-date information on Phoenix’s market condition and opportunities. Feel free to reach out to us for more information at any time.
Arizona’s business growth has been phenomenal, despite being often overlooked in the mainstream media. Arizona is a state that’s currently supporting unprecedented job growth through a long list of innovative companies. As of 2022, Arizona has a total of 154 companies on the Inc. 5000 list, 37 more than the previous year.
Innovation seems to be a key factor in Arizona’s incredible growth. From tech, to real estate, to golf, Arizona – specifically Phoenix and it’s supporting areas – is making waves in multiple big industries.
Commercial real estate is taking off, unemployment rates are falling, and job growth is through the roof. Arizona has seen notable success in the last few years – it’s time to figure out why.
What’s behind Arizona’s business growth?
Geographically, Arizona is the 5th largest state in the country. According to the U.S. Census Bureau, Arizona is also the 14th most populous state. These statistics don’t seem like much until you realize how quickly they are growing. In the last five years, an estimated 1.5 million people have made Arizona their home, and that’s a trend that’s expected to continue in the upcoming decades. Much of this growth comes from dozens of new companies setting up shop in the state, each creating thousands of new jobs in their own right. There is no denying it – Arizona is growing quickly, and it has the space and infostructure to sustain this growth.
Arizona has a number of innovative companies making waves and cultivating levels of advancement unseen before. Here are a few of the highlights.
PXG – Parsons Xtreme Golf
If you’ve been paying any attention to what’s happening in the golf industry the last few years, you definitely know who PXG is. Ranking at just over number 2,000 on the annual Inc. 5000 list, PXG is a company known for a dedication to world-class apparel and equipment. They’ve reconstructed the direct-to-consumer model in golf, dominating the market in more than 50 countries worldwide.
When the company was founded in 2013, they faced a lot of speculation for entering such a “saturated” market. However, the booming golf-centric environment in Phoenix and its surrounding areas proved that PXG could beat the odds.
This Arizona based company is changing the way homes are sold in America. 72SOLD is currently one of the top 500 fastest growing companies in the United States and ranks an unbelievable 10th place in terms of the fastest growing real estate firms in the country. 72SOLD is one of the many reasons Arizona’s business growth supports a bustling residential and commercial real estate market.
PetSmart was founded in Arizona in 1986 and still has its headquarters in Phoenix. For over three decades the company has stood at the top of the pet food and pet toy industry. PetSmart still stands atop the market, even after being faced with eCommerce competition by companies like Chewy and Petsense. They currently support nearly 50,000 jobs in the greater Phoenix area alone.
Some other notable companies in Arizona include Banner Health, Circle K, U-Haul, Sprouts Farmer’s Market, and GoDaddy.
Job Growth in Arizona
In the last 3 years, Arizona’s top 500 companies have seen an average revenue growth of over 2,000 percent, while also adding nearly 100,000 new jobs to the local economy. These same companies have contributed to the 217% increase in six-figure jobs in Arizona from 2015 to 2020. These numbers account for Phoenix ranking second among the fastest growing metro areas in the country. It’s no wonder as to why so many people are flocking to Phoenix.
According to Phoenix Mayor, Kate Gellogo, “The Phoenix metro area is leading the nation in high-wage industry growth, including semiconductors, electric vehicle manufacturing, biosciences, start-ups, and more.” With more legislation expected to pass supporting the manufacturing of semiconductors and microchips, lawmakers estimate Arizona to add upwards of 70,000 jobs in the next few years alone. It wouldn’t be surprising to see a sustained growth in Arizona for years to come.
Business Tax Advantages
It isn’t just the 300 days of annual sunshine bringing big companies and waves of talent to Arizona. The state’s business environment incentivizes more growth by offering some of the lowest operational costs nationwide. Even under somewhat progressive federal administrations, Arizona has bucked the tax-hiking trends, cultivating a business climate that encourages growth, investment in R&D, and innovation across multiple industries.
A few of Arizona’s tax-related highlights include:
- Top 10 most tax-friendly state
- 6th lowest corporate tax rate in the US
- No franchise tax, estate tax, gross receipts tax, or inventory tax
Arizona promotes a pro-business environment by providing a completely refundable income tax credit for qualifying capital investments and job creation projects. The state also recently founded the Angel Investment Program, which provides an additional tax credit of up to 35% for investors who make capital investments in businesses certified by the Arizona Commerce Authority. Such tax benefits account for the many reasons investors in commercial real estate and other business ventures are frequently looking Arizona’s business growth strategy as the gold standard.
The state’s tax credits don’t stop at a corporate level either. In 2021, Arizona passed an unprecedented law governing the state’s income tax. Arizona has since simplified its income tax, reducing the top rate of 4.5% by implementing a flat income tax rate of 2.5%. This change makes Arizona’s state income tax the lowest in the nation.
Final Thoughts on Arizona’s Business Growth
Arizona, like many of the states in the western half of the country, has seen consistent growth in both population and industry over the last several decades. However, in the last few years, economic changes, improved financial infostructure, and a long list of incentives have turned Arizona into one of the top 5 fastest growing states nationwide.
With an expectation that more and more people will be calling Arizona home in the years to come, it’s safe to say this growth will continue. Arizona is turning into a top destination for innovative businesses, talented professionals, and investors in the realms of both commercial real estate, big business, and more.
Are you looking to take advantage of Arizona’s business growth? At ICRE Investment Group, we work with commercial investors, property owners, companies, banks, and commercial loan servicers seeking the highest quality of services in the greater Phoenix, Scottsdale, Mesa and Tempe Arizona regions. We are also have access to commercial investment properties across the globe. Contact us for more information today!
As we face a looming post COVID-19 recession, many investors are scanning the markets in search for 2022’s best Phoenix commercial real estate opportunity. While COVID hit the American public hard, one thing it didn’t stop was commercial growth in cities like Phoenix, Arizona. Brokers, builders, and real estate developers have recorded record numbers in 2021 and the first half of 2022. With sales numbers up and vacancy rates down, investors are flocking to Phoenix to snatch up opportunities – especially in the case of new office construction.
In years past, Phoenix was often considered an afterthought to more lucrative opportunities in cities like San Francisco and Seattle. However, in 2022, it seems the circumstances have flipped. The future now holds far more potential for Phoenix commercial real estate, as compared to the city’s western rivals. In this article, we will dissect the commercial real estate market in Phoenix, and determine whether or not it really does hold 2022’s biggest opportunity.
Construction Demand in Phoenix
When it comes to construction demand, only two cities bested Phoenix’s numbers 2022. Dallas led the country in terms of total square feet deliveries with 15.9 million square feet. Right behind Dallas, Indianapolis and Phoenix posted numbers of 7.9 and 7.7 million square feet respectively. With nearly 44 million total square feet under construction, Phoenix sits behind only Dallas, which posted numbers of nearly 57 million square feet under construction.
When compared to the “lucrative” commercial investment opportunities in cities like Seattle and San Francisco, Phoenix has a much better outlook in 2022 in terms of construction demand. Reportedly, Seattle has only a fraction of new construction underway when compared to Phoenix. Seattle currently has just shy of 8.4 million square feet under construction (compared to Phoenix’s 44 million). At the same time, San Francisco has only around $6.1 million square feet under construction – a number that has been trending down year-over-year.
There are many reasons that can explain the disparities between Phoenix’s construction outlook, and that of Seattle and San Francisco. Some of the more important reasons include rising interest rates and outrageously high construction costs. Reportedly, San Francisco has the highest construction costs in the world, at an average of $440 per square foot. Right behind them is Seattle at nearly $350 per square foot. Meanwhile, Phoenix clocks in at an mere $150 per square foot. The drastic differences in these numbers may have something to do with the reason why both new residents and commercial investors are flocking to Phoenix in droves.
Office Vacancy Rates
Investors looking for office pre-leasing opportunities may want to reconsider options in cities like Seattle and San Francisco. Despite having a history of consistent commercial real estate development, Seattle currently has one of the worst office vacancy ratings in the country. With a 19% vacancy rate in Seattle’s business district and 11% in the tri-county area as a whole, the city has little to show for commercial leasing opportunity. Seattle is currently experiencing one of the worst declines in office leasing throughout the country, coupled with a slowdown in hiring from the city’s big tech companies.
The outlook for San Francisco is no better than Seattle’s. With economists estimating a 2024 vacancy rate to be as high as 53%, investors are struggling to come to terms with the city that once was.
On the other hand, Phoenix is trending up in 2022, with a direct vacancy rate of 6.5%, and a total of 12.2 million square feet of office space available. By the same statistic, Seattle and San Francisco have 31 and 18.7 million square feet available respectively. With companies in tech and finance expanding beyond or moving altogether away from the cities like Seattle and San Francisco, Phoenix is filled with a growing buzz around office leasing opportunity.
Outlook for Office Development in Phoenix
In the aftermath of COVID-19, many investors are leery to stake new claims in the commercial office environment. Given the growing work-from-home sentiment in the world today, it would make sense for office construction to slow down. However, Phoenix has seen quite the opposite effect.
With Class A office space seeing quarter-after-quarter increases in new leases, it’s hard to argue against Phoenix’s office market potential. With popular office spaces in Phoenix’s surrounding areas of North Tempe, Scottsdale, Midtown, and Chandler, the area as a whole currently supports over 5 million square feet in leasing activity.
Comparatively, the greater Seattle area supports just over 1 million square feet in leasing activity – a number that’s expected to decrease in the final two quarters of 2022. The disparity in leasing activity may have something to do with the rent prices. Average asking rents for office space in Seattle currently hover around the $40 per square foot mark, while Phoenix clocks in at only $27 per square foot.
At the top of the office market in Phoenix sit Amazon and Peloton, both of which have been purchasing more and more real estate in the area. Amazon specifically announced a pause on their Seattle office tower construction. Halts on new construction, coupled with growing overall costs, are speculated to be the reasons as to why major tech companies are fleeing Seattle and the Silicon Valley for better opportunity in cities like Phoenix.
A Final Assessment of the Demand for Commercial Real Estate in Phoenix
While the city hasn’t been thought of as a lucrative commercial opportunity in the past, the sentiment towards Phoenix is quickly changing. With a resilient job sector, consistent population growth, and attractive commercial real estate inventory, Phoenix is attracting the eyes of investors across the country. Industry titans like Amazon, Peloton and Stewart Title setting up shop in Phoenix doesn’t hurt the city’s outlook either.
Although the demand for new commercial real estate in the west coast cities of Seattle and San Francisco is currently slowing down (and even coming to a complete stop in some cases), the demand in Phoenix is reaching heights unseen before. Be it in the spaces of industrial, retail, office, or multi-family, there is no denying the city’s current opportunity. Don’t be surprised if Phoenix winds up the top target for commercial real estate investment by 2023.
Commercial real estate is any property used only for business operations or as a workspace rather than a residence. Most often, tenants lease commercial real estate to do business. This type of real estate includes everything from modest offices to enormous standalone structures like shopping malls. Retailers, office space, hotels, strip malls, restaurants, and convenience stores are all examples of commercial real estate.
Regarding health and potential, the CRE market typically follows the lead of the larger market. However, early indications suggest that things may not be as simple for the commercial real estate outlook for 2023. Even as institutions are forced to re-evaluate their strategy and redefine success due to rampant inflation, interest rate increases, work-from-home opportunities, and continuous global economic disorder, investors will continue to be careful yet driven to succeed.
During these times when inflation is high, investors look to commercial real estate to hedge against inflation. Inflation increases the value of commercial real estate, thus providing them protection against uncertaintly in other capital markets. You will typically see a three percent (3%) annual increase or $0.50 per square foot rent increase per year, however a few leases I have personally done have had five percent (5%) annual increases to further hedge against the rising cost of of materials, labors and services of owning commercial real estate.
Institutional Players with More Funding Will Have More Opportunities
The 20-year institutionalization trend in commercial real estate, in which more prominent investment managers outperform smaller companies and affluent people, will continue as long as the market is substantially fragmented. Size might be more advantageous than ever at this time when the sector is dealing with high-interest rates and potential recessionary concerns. Large commercial real estate institutions have a bright future through 2023 because the chance to benefit from economies of scale is only expanding.
Larger institutions might have cheaper access to greater capital pools. Larger institutions benefit from the flexibility of all-cash deals and can invest during more challenging times than their smaller counterparts. They can therefore avoid paying the exorbitant interest rates that smaller institutions, who must take out loans to complete transactions, will pay. While smaller institutions may take a break until circumstances improve, these strong institutions continue to have the freedom and flexibility to move quickly on long-term investment theories.
A Positive Outlook for Multifamily Real Estate in 2023 as Strong Housing Demand Persists
Some market factors that fueled the increase in multifamily housing during the pandemic have subsided. Nevertheless, multifamily investors will be able to continue on their current track due to the persistent housing shortage and high demand for suburban homes. As of June 2022, the housing inventory was only half of the pre-Covid levels, according to CNBC. Several US markets have a significant undersupply of housing units because of the under-delivery of new housing, which has worsened over the past ten years. In addition, rents continue to rise due to high demand, providing investors with even more lucrative options.
However, several variables will make it expensive for investors to compete in this cutthroat industry. For example, construction materials continue to rise in price, pushing up developers’ complex expenses even as they negotiate a competitive labor market. In addition, supply chains prone to issues are delaying shipping and slowing down the time it takes for developers to bring freshly built structures to market.
Even while the forecast for multifamily commercial real estate in 2023 is optimistic, many possibilities will only be accessible to more prominent investors with deeper pools of capital.
The Real Estate Market Could Crash in 2023
According to Fannie Mae, the housing market is expected to calm off from the craziness of 2021 but not as quickly as purchasers would want or anticipate. According to researchers at Fannie Mae, the housing market price spike likely crested, and prices will return to normal. But, again, the time frame is the primary concern.
Top Five Threats for a Housing Market Crash in 2023
If inflation increases, consumer spending will decline, which would cause economic uncertainty, instability, and perhaps even a recession. This will undoubtedly increase the likelihood of a crash in 2023.
- Excessively high market prices Pop a bubble
Sticker shock will eventually set in and reduce shopper demand, making purchases more challenging to afford.
- A rise in Mortgage Interest Rates
The number of possible purchasers will decrease with each percentage point increase, leading to a snowball effect on prices as sellers on the sidelines rush to enter the market to take advantage of the falling prices.
In 2023, the potential reduction in economic activity brought on by a pandemic might increase. As a result, people avoid making purchases because they are anxious about moving.
- Campaigning for 2024 Election
Many people may experience a great deal of uncertainty during the pre-election year, and uncertainty is never good for the economy, especially in the property market in 2023.
Are you looking to lease office space in Phoenix? At ICRE Investment Group, we work with commercial investors, property owners, companies, banks, and commercial loan servicers seeking the highest quality of services in the greater Phoenix, Scottsdale, Mesa and Tempe Arizona regions. Contact us for more information today!
What does it cost to Lease Office Space in Phoenix? Several multinational corporations, including Avnet, Freeport-McMoRan, PetSmart, and Republic Services, are based in the Greater Phoenix area. In addition, the Aerospace division of Honeywell, Intel, U-HAUL International, Best Western, Apollo Group, Uber, Taser (formerly Axon), and General Dynamics are different businesses having headquarters or offices in Phoenix.
Phoenix is a surprisingly welcoming city for small businesses. As the fifth largest city in the U.S., and one of the fastest-growing cities with increasing rent, Phoenix offers prime opportunities for startups, SMEs, and even large corporations to find affordable commercial real estate options with low overhead costs. But unfortunately, not everyone can stroll into a business center or walkable strip and lease office space. Thankfully, this guide will give you a detailed insight into leasing office space in Phoenix so you can make an informed decision, as longer lease lengths have made landlords more receptive to concessions.
The Central Business District and neighboring suburbs account for more than 100 million square feet of the commercial real estate inventory in the Phoenix metro area. As a result, tenants have options to compare, and there is considerable rivalry between landlords to fill premises, as seen by vacancy rates of 19% in the Downtown core and 15% in the suburbs.
Class A space in the Greater Phoenix region rents for about $31 per square foot (per year). Class B space costs about $21 per square foot on average. Class C assets are scarce, typically asking rentals under $20 per square foot. In addition to lease duration, building type, and tenant concessions, different city areas have different lease pricing.
Phoenix’s rental market is still thriving; recently noteworthy agreements include:
General Dynamics leasing 149,000 square feet in Metrocenter
ASU is leasing 60,000 square feet at One Arizona Center Downtown
Amazon is leasing 53,000 square feet in North Tempe
AZ Children’s Association is leasing 40,000 square feet in Midtown
How Much Does it Cost to Lease Office Space in Phoenix?
Pricing a lease before signing a year-long or maybe 5-year lease agreement is almost impossible. While it’s essential to ensure your budget can account for a commercial lease, it’s also critical to do a little research by exploring available office spaces in Phoenix, their average rental rates, and factors that might impact your pricing. It will depend on how much it costs to lease commercial real estate in Phoenix.
Popular Areas to Lease Office Space in Phoenix
As the city’s commercial hub, downtown Phoenix is crucial for politics, government, finance, and professional sports in this area. Rent for offices in this location is roughly $32 per square foot. Although Class B and Class C spots are available, most are Class A.
This urban settlement in Phoenix has a total commercial real estate inventory of almost 10 million square feet and is the location of the Sky Harbor International Airport.
In the Phoenix metropolitan area, several neighborhoods make up East-Central Phoenix. Rent for offices in this location averages only $15 per square foot. 13% of the spaces are currently available for rent.
The area of Phoenix, known as West Phoenix, or West Valley, is reported to encompass Avondale, Buckeye, Glendale, Peoria, Tolleson, and other communities. Renting office space in this area runs roughly $18 per square foot, though the price varies by location.
The largest airport in the state, Phoenix Sky Harbor International Airport, is located in this area, hence its name. This airport, three miles from the center of Phoenix, hosts more than 1,200 aircraft operations per day. Although Sky Harbor is an airport, it also has roughly 5 million square feet of office space. Rent for commercial space in Sky Harbor is about $20 per square foot.
Camelback East Village:
One of the 15 villages in Phoenix is Camelback East. It is situated close to Camelback Mountain, Paradise Valley, and Scottsdale communities. Here, office space is $31/sqft, which is slightly more expensive.
Arizona’s Mesa is a city located about 20 miles east of Phoenix. After Phoenix and Tucson, it is the third-largest city in the state. The National Register of Historic Places has listed numerous historic buildings in Mesa. Unfortunately, less than a million square feet of business space are available to lease in Mesa, which has a solid residential bias.
A desert city in Arizona renowned for its luxurious retail selections and high standard of living. Expect the typical asking rent for office space to range between $25 and $35 per square foot. Spaces close to South Scottsdale and the Scottsdale Airpark often cost more to rent than those in Central Scottsdale.
A city in Phoenix’s East Valley is called Tempe. Here is where the headquarters of Fortune 500 business Insight Enterprises is located. Arizona State University is situated in Tempe. Businesses may anticipate paying around $34 per square foot to rent office space in Tempe. Although Class B and Class C spots are available, most are Class A.
Looking to To Lease Office Space in Phoenix: The Bottom Line…
There has been an increase in sublease space, and some move-outs have also added to the market’s vacancies. Several of the principal occupiers in the market have downsized or relocated to new structures during the past year, leaving empty space in their wake. For example, nationwide abandoned 250,000 SF over two buildings in Central Scottsdale in the first quarter of 2121 and moved into a 282,500 SF space at a recently finished location in North Scottsdale.
Initially, Nationwide intended to occupy the entire 460,000 SF structure, but the epidemic changed course.
Cognizant left Canyon Corporate Plaza in Northwest Phoenix in the second quarter of 2102. The provider of IT for healthcare services relocated into an 87,000 SF space in a recently completed building in North Phoenix earlier this year.
Are you looking to lease office space in Phoenix? At ICRE Investment Group, we work with commercial investors, property owners, companies, banks, and commercial loan servicers seeking the highest quality of services in the greater Phoenix, Scottsdale, Mesa and Tempe Arizona regions. We are also affiliated with CORFAC International, with access to commercial in vestment properties across the globe. Contact us for more information today!