Middle Market Digest: This Week in Southwest

Activity in the Phoenix market returned this week with strong sales and leasing activity and third quarter reports showing the strength of the market. Apartment sales dominated in the Phoenix market this week, however, the star transaction was a two-property Hyatt Hotel portfolio that traded hands for $305 million. A quarterly report from CBRE shows that there is also growth in the office sector, although there were no specific sales to report for the week. The office sector has seen tremendous growth this year, and the report expects the market to perform strongly through the end of the year. The Phoenix market isn’t the only second tier market to see a bump in activity. As pricing increases in primary markets like San Francisco and Los Angeles, investors are also heading to the Inland Empire, where employment growth is spurring office, retail and multifamily demand. That isn’t to say activity has declined in other markets. This week saw significant sales in Los Angeles and San Diego as well. Here’s a look at this week’s trends, announcements and deals that you may have missed in Southern California, Utah, Arizona and Nevada.

BY THE NUMBERS

PHOENIX—The Phoenix data center market continued its steady growth in the first half of 2017. Investment in the U.S. data center sector reached record levels in the first half of 2017, totaling $18.2 billion, more than double that for all of 2016. Construction activity in metro Phoenix is scheduled to add an additional 28 million square feet of supply to its current base of 169 MW. Arizona’s potential as a destination market remains strong, as several providers and large-scale users continue to explore expansion and market entry options. An influx of new competitors and a diverse wholesale supply are generally viewed as positive.