PHOENIX—Large office tenants seeking space in Metro Phoenix are feeling the squeeze as the market tightens and big blocks of space are a scarce commodity, according to a report released by Cushman & Wakefield of Arizona, Inc.

Jerry Noble, managing director of Cushman & Wakefield of Arizona, Inc., tells GlobeSt.com, “The vibrant, walkable areas were the first to recover in the cycle. Now we are seeing some spillover into other areas, and as vacancy diminishes, we're seeing new construction. The trend of California companies relocating to Phoenix is real. They are seeking lower taxes and a good quality of life—that makes Phoenix a true option. The other factor here is that companies are seeking the best working environments for their employees—there is a lot of pressure on how to use the available space—that goes for every industry.

“Four years ago, a tenant seeking more than 100,000 square feet of office space would have more than 80 buildings in the Valley to evaluate,” adds Noble. “Today, there are only 31 spaces of that size, within a wide variety of buildings and geographic areas. Approximately 21.8 percent of the metro area's office space is vacant, but the vast majority of that is in small and medium-sized blocks. Class A office space is becoming the most difficult to obtain in the suburban submarkets where that product type is only 16.6 percent vacant overall.