Metro Phoenix office market vacancy rate drops

Greater Phoenix office vacancy dropped to 15.2% in Q2 due to nearly 700,000 sq ft converted to industrial use. Tenant demand improved, with 286,309 sq ft net absorption, led by Class A buildings. Rental rates rose slightly, especially in Class A assets, while sublease space declined. Sales volume increased 43.5% to $329 million. New development focuses on redevelopment projects, signaling a market rebound with opportunities for investors and users.