Trbo’s Q1 Leasing Market Report – Steady As She Goes

Craig Trbovich Commercial Real Estate –

Net absorption for industrial flex and warehouse properties was negative in March, while office properties continued positively at a slow but steady pace.  Overall for the first quarter, there was net positive absorption as the Phoenix Market continues its bumpy ride to recovery.  All three product types experienced a decrease in vacancy for the quarter, with the warehouse market moving just below 10%, and office and flex properties improving by small amounts.

With vacancy slowly improving, lease rates continue to bounce along the bottom, not showing any firm signs of trending upward yet.  As such, there is still fierce competition among landlords to attract tenants, which is expected to continue until stronger employment numbers surface.  With several recent announcements by companies increasing employment in Phoenix and steady improvement at the National level, stronger employment momentum may be on the horizon.  (See my posts about Macy’s, ZocDoc, Union Bank, and USAA at https://twitter.com/TrboCommRealEst)  So it’s “Steady As She Goes for Q1”, with momentum and positive expectations continuing to build. (See the charts below from CoStar Analytics.)

Phoenix Office

Phoenix Industrial

Later this month, I’ll take a closer look at investment sales for the first quarter and discuss emerging trends.  For a no obligation analysis of your property, please call me at (408) 522-2799 to “TrboCharge” your investment real estate today.