Landlords still searching for tenants, while Investors find value
Phoenix's vacancy rate continued climbing for the seventh straight quarter, ending the year at 15.0%—up over 1,000 basis points (bps) from the beginning of last year and the highest in five years. As competition for tenants intensifies, landlords are lowering rents and offering more incentives. Investors, however, are targeting low- vacancy properties, highlighted by three major transactions exceeding $100 million each.
Notable deals include the sale of the 1.1-million-square-foot (msf) Paloma Vista Logistics Center, fully leased to Amazon, to BentallGreenOak for $118.3 million. EQT Exeter purchased an 860,000-square-foot (sf), six-property portfolio for $143.2 million. In the year’s largest transaction, CIP Real Estate acquired an 11-property portfolio, 98.0% leased to 34 tenants at the time of sale.