Phoenix’s relative affordability attracts tenants looking to relocate or expand their operations in the western United States without paying exorbitant coastal market rents. However, office rents in Phoenix are increasing at one of the fastest rates nationally. Simultaneously, rents are also facing downward pressure in key submarkets due to a rise in sublease space.
Downtown Phoenix offers high discounts due to its more than 20% availability rate. Companies with high-performing remote workers have relinquished unused office space, and are subletting a portion or all of their space. Compared to 2020 and 2021, overall leasing activity has picked up in 2022 quarters and mirrors pre-pandemic levels.