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Expect More Phoenix Market Pain in 2009

PHOENIX-The low absorption, rising vacancies and falling rents that characterized 2008 are likely to grow worse over next 12 months.

By John McCloud | Updated on December 30, 2008

[IMGCAP(1)]PHOENIX-2008 was not a good year for Arizona’s largest commercial real estate community, with growing vacancies and falling rents plaguing every subsector. The coming year looks to bring a yet worsening performance, judging from the comments of local brokers.

“The level of tenant activity has been decreasing since first quarter, which has resulted in one of the slowest years of net absorption that our market has ever seen,” says Patrick Feeney Jr., a senior vice president at CB Richard Ellis specializing in industrial properties. “I think we’ll end this year at 1.5 million square feet of absorption. Our typical year’s activity, on a blended average, easily runs about 6.5 to seven million square feet of absorption.”

[IMGCAP(2)]According to John Bonnell, a senior vice president at Grubb & Ellis

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