As the local and national economies sputter, tepid office demand remains throughout the Phoenix market

Phoenix, having been one of the hottest office markets in the nation prior to the pandemic, is now witnessing a drastic downward decline in office leasing activity. In the third quarter there was less than 1.0 million square feet (msf) leased across the market. Transaction activity slowed by 2.1% from last quarter, and by 56.8% when compared to Q3 2019. COVID-19 and its impact on the economy have severely disrupted the industry. Fears of a potential second wave of infections in the fall and winter have created a wait-and-see approach for many occupiers. To help alleviate these concerns, landlords will need to consider offering marketsensitive pricing and generous concessions in order to attract interest and to cement good long-term relations with tenants.

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