With vacancy rates lower, how long do you expect lease rates to remain lower?
According the Mid Year Office Market report released by CoStar, the office vacancy rate decreased to 19.4% in the second quarter in the Phoenix area overall. With asking office lease rates increasing to $20.05 sf in the second quarter from $19.45 in the first quarter of 2013 on average.
By comparison the office vacancy rate in the Phx-East Valley area was 17.2% with a vacancy rate of 13.7% for class A office buildings, 18.7% for class B office buildings and 13.6% for class C office buildings.
Office lease rates in the Phx-East Valley were similar to the asking office lease rates in the Phoenix area overall at $19.08 sf with an asking lease rate of $23.46 sf for class A office buildings, $19.18 sf for class B office buildings and $14.66 for class C office buildings on average.
It should be noted that 2 of the 3 largest lease signings in 2013 in the Phoenix area office market have been in the Phx-East Valley.
The total office market in the Phoenix area saw a net absorption or 183,607 in the second quarter of 2013, 92,408 of which was in the Phx-East Valley.
Office buildings under construction at the end of the second quarter of 2013, were 68,867 RBA, 0% of which is preleased, all in the Phx-East Valley.
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This information is for informational purpose and not intended to be investment advice, and should be explained to you in detail. You should always feel free to consult an attorney and/or tax adviser to obtain further information you deem necessary. I want you to be prepared.