Phoenix ranks among the 15 hottest tech hubs in N. America
By: AZ Big Media
Phoenix held its own among top tech markets in North during this year’s first half, sustained by the Valley’s growth in both tech employment and office lease rates, according to CBRE’s annual Tech-30 report.
Phoenix’s 8.4 percent growth in tech jobs in 2020 and 2021 helped the market continue to post positive office-rent growth of 4.1 percent over the past two years. Phoenix registered slightly negative net absorption in that timeframe, which followed national trends. Net absorption, a proxy for office demand, measures the net amount of space newly occupied against that newly vacated.
Tempe, the Valley’s leading tech submarket, ranked 10th in office-rent growth (6 percent). The city’s proximity to Arizona State University and limited office availability have helped the submarket outperform the overall market.
“Tempe is being affected by two significant trends. The new demand for office space is still very strong. At the same time, sublease availability is reaching all-time highs,” said CBRE’s Executive Vice President Kevin Calihan. “High-quality space is still in demand, but the market is very competitive as over two million sq. ft. of newly developed space and sublease space has come on the market in the past 12 months. The trendlines indicate that supply will outpace demand over the next 12 months. We don’t know how much excess supply there will be.”