Phoenix Becoming Hot Destination for Office Investors Article originally posted on on January 9, 2019 Foreign interest in the Valley has increased The Phoenix area saw $2.6 billion worth of office assets change hands in 2018, but experts say there is still plenty of runway for prices to grow. Chris Marchildon, a vice president of CBRE Capital Markets, Institutional Properties in Phoenix, said 2018 was on par with what office investment looked like in 2006, but price per square foot still is significantly below what it reached in Phoenix at the peak of the market during 2008. In 2018, average price per square foot for office property sales was $182, about 21 percent below Phoenix’s peak pricing in 2008. “When people talk about where we are in the cycle, we are in the later innings, but there are still many innings to be played in Phoenix,” Marchildon said. Barry Gabel, executive vice president of CBRE who leads the team that includes Marchildon, said Phoenix has caught the attention of U.S. and foreign investors that have not had a presence before in Phoenix. “We haven’t had this diversity of capital before,” Gabel said, adding his team has met with four different groups of Asian investors interested in Phoenix property during the past 60 days. Gabel said many investors new to Phoenix in 2018 have expressed the desire to buy more property in the area this year. Many have been priced out of more expensive markets and want to take advantage of Phoenix’s existing properties that they can buy for significantly less than replacement cost. “When you can buy for less than it would cost to build it, there is a great opportunity to make really smart purchases that provide continued upside,” he said. About $1.6 billion worth of office product is under contract, in the market or scheduled to come on the market in the first quarter of 2019, Marchildon said, which would keep 2019 on pace with previous years. Significant office transactions in 2018 included the Chase Tower in downtown Phoenix, which sold for $107.5 million to Virtu Financial Inc. founder Vincent Viola. The 24th at Camelback building sold for $100 million over the summer to New York life Real Estate Investors.