The Commercial Real Estate market in Phoenix remains weak but there is a sign that it hit bottom in the first quarter of 2010. Locally, this all started in the 2nd Q, 2006 when the local , and national, housing market began to soften. Anyone in the Valley for long realizes that housing is manufacturing and when our largest industry slows greatly, all other industries will follow. Commercial Real Estate lags residential in this cycle.
Vacancy for both industrial and office property are at levels not seen since the early 1990s. Landlords that were turning away deals last summer because the economics were too low, would now jump at the chance to make the same transcation.
At mid-year 2010 the industrial market has actually experienced some positive absorption over 2 million square feet bringing down vacancy slightly. The office market did not experince this positive absorption but its vacancy rate has remained steady for the past 5 quarters.
Generally, the commercial market feels better this summer than last although nothing like the past or even near a market in “equilibrium”. Business’s are
actually making moves in order to take advantage of favorable lease rates and building values.
Economically and politically, locally and nationally, there still does not seem to have been any really change that instills confidence in the future. Buyers are in town buying bank owned properties and investors are looking for value, but there is really nothing to hang your hat on other than the old “….they will come here like they always have…”
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