Office space demand increases over a year ago, but economic uncertainty has become more pronounced

At year-end 2022, the Phoenix office market reported 1.5 million square feet (msf) of leasing activity, up 6.5% from the previous quarter and up 18.4% from a year ago, respectively. This brought full year 2022 total leasing activity up to 5.7 msf, was up 1.7% from 5.6 msf of leasing activity reported in 2021 but still down 20.0% from the 7.0 msf of leasing activity reported in 2019 which was the last full year before the pandemic. Despite the uptick in overall leasing activity in 2022, economic uncertainty has returned as concern over a slowing economy has caused many companies to take a closer look at controlling costs. Nevertheless, larger deals were signed in Q4 2022 such as Maximus renewing for 149,211 square feet (sf) at 2411 W Peoria Avenue in Northwest Phoenix.

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