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Market Report

Phoenix Office Investment Forecast

2020 Outlook

Corporations Take Down Larger Phoenix Footprints Favored by Many Expanding Companies

 
Tenant move-ins and development showcase growth in Valley office market.Phoenix’s young population continues to grow and fill newly created jobs in the metro. An attractive business climate entices several companies to expand operations near talent pools that align with their needs. DoorDash, for example, will move from its existing 52,000-square-foot property in Phoenix to a 345,000-square-foot office in Tempe, headlining interest in the East Valley suburbs of Chandler, Mesa, Scottsdale and Tempe. Developers, meanwhile, are targeting Tempe and Scottsdale, where large mixed-use properties are coming out of the ground. The Watermark in Tempe, for instance, will open to additional tenants this year, adding 265,000 square feet of office space to the metro. In west Phoenix, medical office buildings constitute the majority of office buildings under construction, leveraging the proximity to retirement communities and rapidly growing suburbs. Strong absorption will outpace office construction in 2020, lowering metrowide vacancy to a cyclical low.

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