The Phoenix office market has seen an increase in activity, as well as rental rates, increasing 2.5% YoY. The average asking rates are predicted to remain similar for the rest of 2022. in January 2021, the unemployment rate in the Phoenix market was at 6.6%, but throughout the year we saw this number improve and the year ended at 2.4%. In January 2022, the unemployment rate rose to 3.2%.
Construction of office space remains heavily concentrated in Tempe and Central Phoenix. Future construction will continue to occur in these popular submarkets, as well as the Camelback Corridor. The Phoenix metro office market recorded 2.1 million SF of gross leasing activity for Q1 2022, more than doubling the activity from Q1 2021 of 0.9 million SF.
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