Craig Trbovich Commercial Real Estate –
The 2012 year-end CoStar results are in and it comes as no surprise that the Phoenix commercial real estate market has continued its gradual improvement in 2012. However, an exceptionally strong 4th quarter was a little surprising to most of us. I personally realized an unreal increase in activity in the 4th quarter and am continuing to see that progress in early 2013, in spite of fiscal cliff and debt ceiling concerns. (Maybe there was pent-up demand after the elections?) One surprising statistic was the 1.6 million square feet of net absorption in Phoenix office market in the 4th quarter. That is as much as the first three quarters combined and the largest net absorption in over 5 years! That also resulted in a corresponding drop in office vacancy by almost a full percentage point for the quarter. Likewise, the 4th quarter was also the strongest for the industrial market in 2012.
The year-on-year comparison also looks positive as the charts below from the CoStar reports summarize. Notably the increase in office net absorption (3.2m square feet), a strong reduction in warehouse vacancy (2.1%), and a 23% increase in price per square foot for industrial values. For a full copy of each CoStar report with much more detail, go to 2012 Q4 Phoenix Office and 2012 Q4 Phoenix Industrial.
If you are interested in any of the National or Retail reports, or for a no obligation analysis of your property, please call me at (408) 522-2799 and “TrboCharge” your investment real estate today.
Phoenix Office
|
2012 |
2011 |
Change |
|
| Cap Rate |
6.60% |
8.63% |
-2.23% |
| Price per SF |
$130 |
$128 |
$2 |
| Sales (number) |
71 |
60 |
11 |
| Sales (dollars) |
$653,814,783 |
$918,643,987 |
-$264,829,204 |
| Lease vacancy rate |
19.4% |
20.7% |
-1.3% |
| Lease SF net absorption |
3,272,354 |
1,257,758 |
2,014,596 |
Phoenix Industrial
|
2012 |
2011 |
Change |
|
| Cap Rate |
8.18% |
7.62% |
.56% |
| Price per SF |
$58.67 |
$47.72 |
23% |
| Sales (number) |
134 |
111 |
23 |
| Sales (dollars) |
$632,926,454 |
$345,138,008 |
$287,788,446 |
| Lease vacancy rate (flex) |
20.5% |
21.1% |
.6% |
| Lease SF net absorption (flex) |
167,490 |
175,194 |
-7,704 |
| Lease vacancy rate (warehouse) |
11.4% |
13.5% |
2.1% |
| Lease SF net absorption (warehouse) |
4,698,123 |
6,993,112 |
-2,294,989 |