PHOENIX, ARIZONA -- Greater Phoenix had a banner 2018. During the 12-month period ending in December, preliminary estimates show that employers added nearly 79,700 net new jobs, an increase of 3.9 percent, which marks the fastest growth in over a decade. This places Phoenix 4th among the top-36 major employment markets in the country for new job growth, up from 5th in 2017.
Overall the Greater Phoenix office market had a strong 2018, although net absorption declined in 4Q from more robust levels recorded earlier in the year, over the year absorption hit 3.53 million square feet, an increase of 106 percent from 2017. Employers continue to add workers at a very active pace, fueling tenant demand for office space and fueling new development.
While net absorption moderated in the fourth quarter, tenant move-ins still far outpaced new construction which drove vacancy down to 13.9 percent, 200 basis points lower than one year ago. Continued vacancy declines are supporting rent growth, although gains in 2018 have been more modest than in earlier years. Asking rents ended the fourth quarter at $24.81 per square foot, up 2.6 percent from one year ago.
Investment sales volume posted a minimal five percent year-over-year decline to 2018’s $2.47 billion. The median price per SF for 2018 was up 17 percent to $176 with cap rates at 6.9 percent.
For full report: https://www2.colliers.com/en/Research/Phoenix/2018-Q4-Greater-Phoenix-Office-Market-Report