TAKEAWAYS
- Ending a streak of five consecutive quarters of increases, Phoenix saw a decrease in overall availability, falling 20 basis points from Q2 to 23.3% in the third quarter.
- While other major office markets began to see sublease availability contract, Phoenix observed continued growth in the third quarter with available sublease inventory rising to approximately 4.6 million square feet (msf) and increasing by 44 percent year over year.
- Occupiers have clearly reengaged the market, as evidenced by the more than 1.9 msf leased, marking the fourth straight quarter in which leasing activity increased over the prior period.
- Overall asking rental rates have fallen by 1.0 percent over the last year, to $27.98 per square foot (psf), due in part to downward pressure on direct rents from heavily discounted sublease space that has flooded the market.
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