Phoenix ranks among top US markets for office conversions

Article originally posted on Phoenix Business Journal on June 4, 2025

More office space is planned to be demolished or converted than built this year across the country, as the market adapts to changing work habits and preferences among office users during the post-pandemic return to work.

About 23.3 million square feet of office space is set to be demolished or converted this year nationally, while about 12.7 million square feet is expected to be constructed, according to a new report from CBRE research, including data from 58 markets it tracks.

In Phoenix, 15 projects amounting to about 3 million square feet of office space are planned for conversion or already underway, making it the No. 9 market for such projects across major U.S. cities.

While the shift is helping reduce total office inventory in the U.S. — and in Phoenix — the Valley also has several notable new-build corporate headquarters projects underway.

That includes Sprouts Farmers Market’s new HQ, a 180,000-square-foot mixed-use campus under construction in the CityNorth development near 56th Street and the Loop 101, which is expected to open next summer. Sprouts CEO Jack Sinclair said the new campus and amenities like elevated food, beverage and retail concepts aim to bring employees back to a place they actually want to work.

“We’re not completely in the dark, but we’re still trying to understand what the return to office looks like,” said Charles Miscio, senior vice president with CBRE specializing in office leasing.

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