Phoenix office market report

Q1 2024


Total vacancy rate (%)

The Phoenix office market has witnessed a steady increase in vacancy rates, reaching a high of 25.3% at the beginning of 2024, consisting of 19.4% direct vacancy and 5.9% sublet vacancy. Amidst the ongoing post-pandemic struggle, direct vacancies continue to fluctuate in an upward direction. Notably, sublet vacancies have surged nearly fifteenfold from 0.4% in Q1 2020 to 5.9% in Q1 2024, meaning there’s been a significant increase in sublet space. The submarkets closer to Downtown Phoenix are contributing greatly to these heightened vacancy rates as large contiguous spaces and high-rise buildings remain available.


Direct asking rents ($ psf)

Despite rising vacancies and increasing company downsizing due to the hybrid work-from-home culture, asking rents in the Phoenix office market continued to climb. In Q1 2024, Class B rents experienced a modest increase from $26.80 in Q3 2024 to $26.93 per square foot. Class A asking rents showed a year-over-year increase of 3.3% from $32.17 in Q1 2023 to $33.24 in Q1 2024.

These increases resulted in an overall $30.85 per square foot asking rent in Q1 2024, making a $0.76 increase from Q1 2023 at $30.09.


Sales volume* ($)

In Q1 2024, Phoenix witnessed investment sales surpassing $108 million in traditional office and medical office properties exceeding 20,000 square feet. Notably, medical office investment sales, excluding owner-user properties, reached $52.8 million, representing 48% of the quarter's total performance. Despite recent lows in traditional office property sales volume, the medical office sector shines as a standout in the market, emphasizing the continued resiliency of this property type.

Your source for the latest Phoenix office market reports

Get in-depth office market reports and insights from commercial real estate experts in the Greater Phoenix area. Avison Young advisors look at Phoenix commercial real estate activities and the latest Phoenix statistics to provide you expert market research on Phoenix's office properties.

Explore different topics like the latest office market pricing trends and analysis of Phoenix's current office real estate market conditions. Gain a better understanding of Phoenix’s office real estate outlook and stay ahead of current office space trends. Make smart decisions when it comes to investing in office properties in Phoenix's competitive office real estate market. Avison Young is your trusted source for commercial real estate office market insights in Phoenix.

The dashboard was delivered through AVANT by Avison Young: leveraging real-time data and analytics to make cities and location-based decisions more transparent and efficient. Learn more about AVANT.

Get the latest Phoenix office market reports right in your inbox