- Sublease Vacancies Decrease: The amount of vacant sublease space available for lease decreased quarter-over-quarter for the first time in over 3 years, as direct vacancies outpace sublease vacancies for the second consecutive quarter.
- Camelback Corridor Maintains Lead: The Camelback Corridor submarket continues its streak of positive quarterly absorption going back to 2021, while commanding the region’s highest Class A rental rates and well below average vacancy rates.
- Leasing Activity Slows: Gross leasing activity continued a downward trend for the fifth quarter in a row. In the first quarter of 2023, leasing activity was down 15% quarter-over-quarter and down 45% year-over-year.
- Asking Rental Rates at All-Time High: Despite increasing vacancies and subdued leasing activity, average asking rental rates continue to rise. Overall asking rent reached $28.84 per square foot in Q1 2023.
- Construction Remains Soft: The total office square footage currently under construction is at its lowest level in over a decade at 326K square feet. This equates to just 16% of the 10-year average construction level of 2.1M square feet.
