The final medals have been given out and the winners have been named for the 2016 Summer Olympics in Rio. Now the Cushman & Wakefield research team takes our attention away from the TV to focus on the performance of Phoenix’s office submarkets in the 2016 Office Olympics. Taking notes from Simone Biles and Michael Phelps, Tempe North, Mesa and Camelback Corridor submarkets outperformed their competition during Q2 2016.
Using the results from Q2 2016, we analyzed the performance of Phoenix’s 22 submarkets against their performance during the Q2 2012 Office Olympics:
Tempe North won by a landslide with 620,000 square feet (SF) of new Class A office space. Tempe North surpassed their competition in this category due to the Marina Heights delivery of Building B. In comparison to the Q2 2012 Office Olympics, Tempe North made a huge leap from four years ago where they had no new completions.
The Tempe North submarket dominated all other submarkets during the second quarter with over 572,000 SF of net absorption, landing them a gold medal. Tempe North’s net gain is due to State Farm taking down the second building (620,000 SF) of their five-building regional headquarters. This was a 370,000 SF change (183.9% improved) in absorption for Tempe North from the Q2 2012 Office Olympics.
Mesa’s 8.7% low vacancy rate crowned them a winner in this category, with a staggering difference from the overall vacancy rate across all 22 submarkets of 18.0%. This is a 31.5% drop in vacancy rate for Mesa from the Q2 2012 Office Olympics.
Direct Avg Asking Rent
A gold medalist, Camelback Corridor showed a $6.75 increase (27.6% improved) over the Q2 2012 Office Olympics. In regards to average asking rates for Class A space, the Camelback Corridor ($31.20) and Scottsdale South ($30.39) submarkets remain high on the leaderboard. Despite having the highest rates in Metro Phoenix, Cushman & Wakefield tracked over 84,000 SF of combined leasing activity for Class A space in these two submarkets during Q2 2016.
YTD Net Absorption
The Cinderella story in this Olympics has to go to Tempe North with a 531,000 SF change in net absorption (707.1% improved) from Q2 2012. Coming out on top in the final round, Tempe North won gold with 607,000 SF of YTD Net Absorption.
The final medal count at the closing ceremonies of the 2016 Phoenix Office Olympics crowns Tempe North the most decorated market, medaling in four out of the five categories with three gold medals.