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Phoenix Office and Industrial Markets Slow, But Don't Stop

PHOENIX-Office and industrial markets in the region are definitely following suit with the nation. Office vacancy was 12.8% at midyear and industrial, 8.9%. The sectors haven't stopped, but new construction is going to make the burden even harder to bear.

By D.J. Burrough | Updated on September 19, 2001

PHOENIX-Market experts predict the Valley’s slowing office market won’t turn around for perhaps three years. A year ago, it was racing at breakneck speed.

The Valley clearly is in the throes of a major downturn in its office and industrial markets, but it’s not completely come to a stop, according to a consensus of real estate professionals gathered for the Arizona NAIOP Chapter’s Trend Watch 2001. “We were going 100 miles an hour and now it’s like we are in a school zone,” says Pat Feeney Jr., a CB Richard Ellis senior vice president. “We aren’t in park, but user activity has dropped off.”

At midyear, vacancy stood at 12.8%, its highest point since 1994 and nearly 3% higher than at the start of this year. “We are just a little supply heavy in office,” Christopher Toci, associate director in the Phoenix office of Cushman & Wakefield of Arizona Inc., tells GlobeSt.com. “It’s just a near-term overhang. It’s not gloom and doom. We just need to get caught back up on the demand side.”

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