PHOENIX, Ariz. (October 10, 2025) – CBRE has released its Q3 2025 market figures for Phoenix’s industrial, office, and retail sectors, highlighting broad-based momentum as the metro region continues to attract investment and tenants across all asset classes.
Industrial: Absorption Surges as Vacancy Falls
Phoenix’s industrial market posted 6.4 million square feet of net absorption, the highest quarterly total since Q2 2022. Vacancy dropped 90 basis points to 11.0%, marking the second consecutive quarterly decline as large users continued to expand in the West Valley.
Fifteen new buildings totaling 2.3 million square feet delivered during the quarter, down 68% year-over-year, while another 10.9 million square feet remained under construction. Average asking rents held firm at $1.07 per sq. ft. NNN, reflecting less than a 1% decrease quarter-over-quarter.
Major lease transactions included CEVA Logistics (1.3 M SF) and Walmart (1.28 M SF) in Goodyear, underscoring continued demand for distribution and manufacturing space in Phoenix’s growing logistics corridor.
Office: Positive Absorption Returns
The Phoenix office market recorded 212,669 square feet of positive net absorption in Q3 2025, marking a welcome turnaround for the sector. The vacancy rate fell 30 basis points to 21.8%, while average full-service gross lease rates rose 0.9% year-over-year to $31.73 per sq. ft.
Leasing activity was led by tenants upgrading to quality space in core submarkets, with ongoing trends favoring hybrid-ready offices offering strong amenities and access to talent hubs across the metro.
Retail: Vacancy at Near-Record Low
Phoenix’s retail sector posted 358,329 square feet of positive net absorption and 1.5 million square feet of gross absorption in Q3 2025. Vacancy fell 10 basis points to 5.1%, roughly 400 basis points below the metro’s long-term average, while the average asking rent rose 2.6% quarter-over-quarter to $18.86 per sq. ft. NNN.
Deliveries totaled 269,621 square feet, with 1.23 million square feet still under construction. The West Phoenix submarket captured most of the tenant activity, including new leases by Target (145,000 SF), Amped Fitness, and Cavender’s.
Market Outlook
Across all sectors, Phoenix continues to demonstrate resilience and balanced fundamentals. CBRE expects steady leasing demand, a disciplined construction pipeline, and improving capital-markets activity as interest rates stabilize and investors re-enter the market.
Full reports for Industrial, Office, and Retail market figures can be viewed here: