Office deals in Phoenix in the first quarter of 2018 were white hot, with a number of large sales and leases taking place. According to CBRE, the net absorption in the Phoenix office market reached 154,716 square feet with nearly 1.3 million square feet of gross absorption.
Let’s take a closer look at a few of the big Phoenix office deals that closed at the beginning of 2018.
Largest Office Leases via CBRE
- Bank of America leased 130,311 square feet at 201 E Washington Street in the Central Business District
- Vanguard leased 127,787 square feet at 16425 N Pima Rod in the Scottsdale Airpark/Desert Ridge submarket
- Allstate subleased 100,622 square feet in Allred Park Place Central located at 1450 S Spectrum Blvd in the Southeast Valley
- Arizona State continued to expand its campus by leasing 60,203 square feet at One Arizona Center located at 400 E Van Buren St in the Central Business District
- McKesson Corporation leased 60,000 square feet at Chapparal Commerce Center II located at 5801 N Pima Rd in the Central/South Scottsdale submarket
Q1 2018 Top Office Sales via Lee & Associates:
- D.L. Long Properties purchased 1850 N. Central Ave from McCarty Cook & Co for $80,700,000. The Class A property is 485,687 square feet.
- Arch Street Capital Advisors purchased 2299 W. Obispo Ave from Everest Holdings for $39 million. The Class B office building is 180,480 square feet.
- The Orris Family purchased 9999 N 90th Street from Bahraqin Mumtalakat Holding Co. for $30.5 million. The Class B property is 92,562 square feet.
- Sentinel Real Estate Corporation purchased 8990 W Glendale Ave from Artis REIT for $19 million. The Class A office building is 106,418 square feet.
- Taconic Capital Advisors purchased 20401 N. 29th Ave from Cohen Equities NY for $18.5 million. The Class B office property is 138,540 square feet.
Q1 Office Market Key Takeaways via Lee & Associates:
- Total vacancy: 19.39 percent
- Year-to-date Net absorption: 686,469 square feet
- Average asking rents: $25.47 per square foot
- 2,839,908 square feet under construction
- 2,538,998 square feet of sublease space available
Cushman & Wakefield also reported that in the first quarter of 2018, vacancy in the Metro Phoenix office market was 16.8 percent – the lowest vacancy rate since the second quarter of 2008, when it rested at 16.6 percent. The office market in Phoenix also continued to experience positive occupancy growth and absorbed more than 849,000 square feet during Q1 2018. This is the largest net gain for the first quarter since 2006.
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