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CBD Office Vacancy Rate Passes 14%

PHOENIX-The Downtown portion of the 14.1-million-sf CBD boasts a slightly lower vacancy rate as well as lower asking rents. Uptown, however, is the larger piece of the CBD submarket.

By John Rebchook | Updated on November 29, 2001

PHOENIX-The Central Business District, by far the largest submarket in the metropolitan area, posts an overall 14.05% vacancy rate in the third quarter, slightly better than the 15.8% overall vacancy rate for the entire market, shows a third-quarter ”Market Snapshot” by the local Grubb & Ellis office. However, the 14.1 million-sf CBD is really two submarkets — Downtown and Uptown.

Uptown is the larger of the two, with 8.5 million sf of space. It has 1.2 million sf vacant in the third quarter and office vacancy rate of 14.29%. In the third quarter, it absorbed 101,187 sf, but in the first nine months of the year it has 86,888 sf of negative absorption.

There’s no construction underway in the Uptown area. The asking rental rate in class A properties is $19.98 per sf, below the average asking rate in the entire market of $23.36 per sf. The asking rate for class B properties is $18.14, below the overall average asking rate of $19.72 for all class B properties, Grubb & Ellis notes.

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