Category Archives: Market Trends

Phoenix 1Q14 Office Snapshot

The Metro Phoenix office sector continues to improve as the New Year gets underway. With vacancy rates continuing to decline and rental rates steadily increasing, the outlook is positive for a stable 2014 for the sector as it transitions out of the recession. New product deliveries and construction also increased in the first quarter of the year, with 272,710 SF being delivered and over 1.9 million SF in the pipeline.

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Vacancy rates for the first quarter of 2014 dropped significantly, coming in at 18.7% overall, down from 19.4% at the end of 2013. Vacancy has seen great strides in the last year; in Q1 2013 the vacancy rate sat at 20.5% overall for the office sector. Vacancies also seem to be leveling between product types; when tenants could no longer afford their high-end spaces, vacancy rates increased dramatically for Class A space, and then began to readjust as those products became more affordable in the last two years and tenants were able to upgrade. At the beginning of 2011, the difference in vacancy percentage between Class A and Class C was hovering around 8%, while now they are almost identical. This will begin to level the playing field for all product types instead of the focused activity in higher end space.

Read more by downloading the full report.

2013 Phoenix Metro Investment Market Report

Presented by Barbara Lloyd & Lane Neville

2013 was a dynamic year for investment sales in the Phoenix metropolitan market. We saw a steady number of transactions in comparison to 2012 and continue to see increased buying demand in the market. The elevated demand in our market, along with relatively low interest rates, has contributed to improving property values and lower cap rates.

2014 will be a year of transition with property performance and values continuing to improve. We are seeing a shift in the market, going from buyer’s chasing distress properties to placing capital in quality, more stabilized assets. Many of the properties that were purchased over the past five years, out of distressed situations, are now in a position to re-enter the market as a stabilized or semi-stabilized asset.

As we see distressed opportunities lessen on the local and regional REO level, our team continues to track the upcoming opportunities that may present themselves in the CMBS arena. Although we currently see a lull in CMBS delinquencies, based on the timing of upcoming maturities, high loan amounts and potential lack of equity or new debt for existing borrowers, there will be increased new CMBS distress opportunities over the next 12 to 36 months.

Overall, the outlook for the Phoenix metro area remains optimistic and that outlook will only continue to strengthen with improved job numbers and limited raises in interest rates.

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Q4 2013 – NAI Horizon Retail Market Report

The final quarter of 2013 continued to show positive retail market results. The sector saw drops in vacancy, gains in properties sold and demand for retail space increase throughout the fourth quarter. With small amounts of new construction in the works, retail market fundamentals are still geared for strong continued growth in leasing velocity, absorption and rental rates.

During the final quarter of 2013, vacancy fell to 10.4% from 10.6% in the third quarter, which is the lowest rate seen since the first quarter of 2009. With unemployment continuing to fall, there is promise for those in the work force, and in turn, consumerism for the retail market. For the calendar 2013 year, vacancy percentages were at 10.8%, a decrease from last year’s vacancy rate at 11.3%, indicating an upswing in occupancy for retail space.

Read more in the full report by clicking the image below: