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Phoenix, AZ

Apartment
The Phoenix apartment market vacancy rate ended the first quarter of 2017 at just 4.4%, down 10 basis points for the period following a loss of 10 through all of 2016. Rent growth, approaching 6.0% in both 2015 and 2016, is slowing this year. At $938 and $873 per month, asking and effective averages for the first quarter of 2017 were up 0.5% and 0.7% for the period following last year’s gains of 5.6% and 5.8%. VIEW APARTMENT LISTINGS >
Industrial
The Phoenix warehouse/distribution space sector accounted for 140.1 million square feet as of the first quarter of 2017. Occupancy in the warehouse/distribution market, Phoenix’s most dynamic industrial real estate sector, has been recovering more or less steadily from the losses suffered as a result of the recession. While the 14.8% vacancy rate recorded for the first quarter of 2017 represented a gain of 10 basis points for the period, 2016 saw vacancy decline by 70 points—even as construction completion totals were on the rise. The rate for April, meanwhile, was 14.4%. At $5.79 psf and $5.28 psf, first quarter 2017 asking and effective average rents for warehouse/distribution space were up 0.5% and 0.6% for the period following last year’s increases of 2.7% and 2.9%. April 2017 followed with increases of 0.2%. Phoenix’s large high-tech industry base, rooted in the East Valley (in Tempe and Chandler in particular), has given rise to a substantial Flex/R&D real estate sector. Reis counts Phoenix’s total Flex/R&D real estate sector inventory at 31.5 million square feet. Vacancy in the local Flex/R&D space market, also elevated, also has been declining overall—and more rapidly as well. The first quarter vacancy rate was 18.9%, up 70 basis points for the period following the previous quarter’s 60-basis-points loss. April saw a 20-basis-points decline to 18.7%. The Flex/R&D market also does well. At $10.68 psf and $9.50 psf, first quarter average asking and effective rates were up 0.3% and 0.2% for the period on the heels of gains of 1.7% and 1.9% through 2016. April 2017 followed with respective gains of 0.1% and 0.2%. VIEW INDUSTRIAL LISTINGS >
Office
Phoenix’s 75.0-million-square-foot general purpose, multi-tenant office market overall metrowide first quarter 2017 vacancy rate at 23.4% was down 40 basis points for the period following a loss of 60 basis points all told last year. A full 20 basis points were added back in April. At $24.95 psf and $19.47 psf, average asking and effective rates for the first quarter were up 0.6% and 0.7% for the period following gains of 3.8% and 4.0% all told last year, the highest rates of growth reported by the firm for this market since the huge gains of 2007 and earlier. April added increases of 0.1% to both rates. VIEW OFFICE LISTINGS >
Retail
A small increase in the vacancy rate in the Phoenix community-neighborhood shopping center market in 2015 was reversed the following year as the downward movement, under way since 2012, resumed in 2016. The rate declined again in the first quarter of 2017, closing the period down 10 basis points since year-end following that year’s 60-basis-points loss. April followed with no additional change. At $20.06 psf and $17.21 psf, asking and effective averages for the first quarter were up 0.4% and 0.5% for the period following last year’s gains of 1.2% and 1.3%. An essentially flat performance followed in April. VIEW RETAIL LISTINGS >

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Source: Data provided by Reis, inc.

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