Phoenix Office Market Is a Rock Through the Pandemic

Article originally posted on Globe St. on July 30, 2020

“Colliers tracks absorption when a tenant moves in, not on the sign date. 2019 set this quarter to preform very well,” Phil Hernandez of Colliers International, tells “However, the next two quarters will look drastically different if one of two things do not happen; either the Cavasson building delivers and Nationwide moves in, or we see large deals close in the next few weeks. There are a lot of large deals that have been paused since March, hopefully the tenants are able to move forward relatively soon.”

Like the national market, Phoenix also saw a jobs rebound in May with unemployment trends reversing. This was largely linked to the reopening of the market. “Unemployment revolved around the state closure in April, the jobs lost were primarily with leisure and hospitality,” says Hernandez. “On May 15th, the state softly opened back up, not everyone got their jobs back, but there was a sharp increase of employee returning to work. Metro Phoenix was gaining so many jobs in late 2019 and early 2020 that finance and insurance maintained a positive year-over-year growth for month January though June.”

Unsurprisingly, class-A office performance is outpacing class-B performance. “Companies looking for employees are finding that an employee is more will to commit to a company depending on the quality of their office space,” adds Hernandez. “This is not saying that all class-B buildings are far less attractive, but class-A buildings have a desired appeal to them.”

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