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Avison Young releases its Fourth Quarter 2022 Office Market Report for Phoenix
January 9, 2023
Phoenix, AZ – Avison Young recently released its Fourth Quarter 2022 Phoenix Office Market Report. 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 looks to close the year at 3.0% - a remarkable rebound compared to the Valley’s high of 12.8% at the start of the pandemic.
“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 and 2023 will definitely be more challenging for most office landlords,” said Mark Seale, Avison Young Principal and Director of Brokerage Services – Phoenix.
Net absorption posted its third straight negative year, ending 2022 with negative 2,435,146 sf of total net absorption. Since the pandemic, the office market has struggled to recover. The adoption of remote working has led many businesses to analyze their needs and right-size their office portfolios. Additionally, national layoffs and companies prepared for an economic downturn have played a large role in the reduction of office space.
Office transaction volume was down year-over-year by $196,934,787. However, 2022 saw 18 more properties transacted over the course of the year – bringing the total amount of office building transactions to 160. Regardless of the reduction in sales volume year-over-year, it should be noted that sales metrics in the last two years have reverted to their pre-Covid levels, which have remained consistent over the past 6 years with 2020 being the sole outlier.
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Media Contact: Darcie Giacchetto, Media Relations Specialist – Southwest: +1.949.278.6224