The Phoenix Commercial Real Estate Market

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Across the country, commercial real estate professionals eye Phoenix as a resilient, fast-growing market opportunity in which to invest successfully.

The Phoenix MSA’s resilient job sector, population growth, attractive CRE inventory, and multiple corporate, regional headquarters position the region as a viable option for investors and tenants alike. Crexi equips both individuals seeking Phoenix commercial property and the agents representing them with an all-in-one platform to buy and sell commercial real estate.

Buyers and tenants harness Crexi’s robust marketplace and search tools to browse through thousands of Phoenix-Mesa-Chandler-Scottsdale MSA and find the perfect fit. Of these searchers, which comprise approximately 92% of Crexi’s digital traffic, many are considering Phoenix’s CRE market as an excellent investment option.

Brokers in Phoenix utilize Crexi’s marketing and listing management tools to connect with potential buyers and guide deals from list to close quickly and efficiently. Crexi’s suite of robust broker tools connects Phoenix commercial brokers with viable, actively-searching leads, no matter where they’re based.

As of this writing, Crexi has helped commercial real estate professionals successfully close more than $330 billion in property value and market over half a million properties valued at $2 trillion.

Crexi is proud to serve Phoenix, Mesa, Chandler, Scottsdale, Glendale, Tempe, and beyond as the fastest-growing online commercial real estate platform.

The State of Commercial Real Estate in Phoenix

Phoenix was among the top targets for commercial real estate investment last year, with all commercial real estate sectors reporting exceptional performance. Going into 2022, industry experts expect the Phoenix commercial real estate to continue outperforming, with industrial and multifamily leading the way.

Over 24 million square feet of industrial space is currently under construction, with Phoenix ranking fifth in the US for industrial construction activity. On the multifamily front, over 32,000 apartment units are under construction in hot suburban submarkets such as Scottsdale, Tempe, and Chandler.

Home to over 4.9 million people in the metropolitan area, Phoenix is the largest city in the state and more than twice as large as Tucson, an hour and a half drive to the south. Originally settled as an agricultural community, the economy of Phoenix has evolved to a thriving mixture of all types of businesses. 

Major companies doing business in Phoenix include Freeport-McMoRan, Avnet, PetSmart, U-HAUL International, Best Western, Apollo Group, and Honeywell’s Aerospace division. Phoenix has been named the fastest-growing city in the country and number one for job growth.

Phoenix Regional Breakdown

Phoenix was the fastest-growing city in the country over the past ten years, adding over 200,000 new residents from 2010-2020 with a population growth rate of 11.2%. With a current metro population of over 4.9 million, the population of Phoenix is projected to increase by another 750,000 people in the next seven years.

  • Phoenix is home to over 1.6 million people, with over 4.9 million residents living in the metropolitan area.
  • The population of Phoenix grew by nearly 1.9% last year and by 11.2% over the past ten years.
  • Phoenix is the capital of Arizona, the most populous city in the state, and the fifth most populous city in the US.
  • Metropolitan Phoenix includes the major cities of Scottsdale, Mesa, Chandler, and Tempe.
  • The median age in Phoenix is 37.2 years, a little less than the figure for Arizona and the US.
  • In Phoenix, median household incomes increased nearly 5.4% year-over-year, while property values grew by almost 6.2%.
  • Phoenix’s per capita income is $34,074, and its median household income is $67,896.

Phoenix Job Market

Robust in-bound migration from the East and West coasts combined with company expansions and relocations to pro-business Phoenix is helping to keep the job market here strong. The job market in Phoenix has grown by almost 6% year-over-year, with small business employment helping Phoenix to come in #1 in the nation for job growth.

  • The Phoenix-Mesa-Scottsdale AZ MSA‘s GDP is over $281 billion and has grown by more than 57% in the past ten years.
  • The unemployment rate in Phoenix was down to 2.8% as of November 2021.
  • Phoenix’s fastest-growing employment sectors include leisure and hospitality, professional and business services, trade and transportation, and education and health services.
  • Metropolitan Phoenix’s top key industry sectors are advanced manufacturing, aerospace and defense, cybersecurity, e-commerce and logistics, and healthcare and biomedical.
  • Major employers in Phoenix include Wells Fargo, Bank of America, City of Phoenix, Maricopa County, Wal-Mart, and Banner Health.
  • Arizona State University, Northern Arizona University, and the University of Arizona are three of the major educational institutions with campuses in Phoenix.
  • Over 32% of the residents of Phoenix hold a bachelor’s degree or higher, while 88% have high school degrees.

The transportation infrastructure of Phoenix includes freight rail service to the West Coast, Mexico, and the Southwest, two interstate highways, and Sky Harbor International Airport.

Phoenix Industrial Market

The Phoenix industrial market has seen 46 consecutive quarters of positive net absorption, which has driven vacancy rates down to just 4.2%. In fact, the 15.2 million square feet of net absorption year-to-date is the highest level of net absorption of industrial space ever recorded in the Phoenix market.

  • Total industrial inventory: 350,589,871 SF
  • Average asking rent: $0.79 per SF per month, NNN
  • Vacancy rate: 4.2%
  • Absorption: 15.1 million SF through Q3 2021
  • New construction: 2.1 million SF delivered year-to-date with 28.2 million SF under construction
  • Key lease transactions by tenant: UPS, Amazon, Solid Cabinetry, SKU Distribution
  • Largest industrial submarkets: Southwest Phoenix, Tolleson, Chandler, Deer Valley

Learn more about Phoenix industrial property for lease.

Phoenix Office Market

The Phoenix office market continues to see more demand from tenants looking for Class A office space with affordable asking rents. Gross leasing activity in Q3 2021 came in at 2.3 million square feet, a gain of 1 million square feet compared to the previous quarter. For the second quarter in a row, Class A office buildings in Phoenix saw the largest increases in new leases.

  • Total office inventory: 92,031,341 SF
  • Average asking rents: $27.62 per SF year, full service gross, all classes
  • Vacancy rate: 22.9%
  • Absorption: -2.2 million SF YTD
  • Leasing activity: 4.6 million SF YTD
  • Key leases by tenant: Amazon, Peloton, Maricopa County, Stewart Title
  • New construction: 388,347 SF delivered in Q3 2021 with 1.3 million SF currently under construction
  • Key sales by property: Fountainhead Office Plaza, Rio2100, Gainey Ranch Corporate Center
  • Largest office submarkets: North Tempe, Scottsdale Airpark, Midtown, Chandler/Gilbert

Learn more about Phoenix office property for lease. 

Phoenix Retail Market

Investors like what they see in Phoenix’s retail market, with investment sales in Q3 2021 totaling more than 56% of the entire year of 2020. Rents are on the rise, and vacancy is on the decline, with in-bound migration and the robust Phoenix economy helping consumer retail spending increase by nearly 19% compared to the beginning of 2020.

  • Total retail inventory: 177,610,772 SF
  • Average asking rent: $14.94 per SF per year, NNN
  • Vacancy rate: 7.2%
  • Absorption: 786,071 SF through Q3 2021
  • Key leases by tenant: Mind 24/7, Painted Tree Marketplace, Second Swing, Kohl’s
  • New construction: 496,386 SF delivered YTD with 473,184 SF under construction
  • Key sales by property: Crossroads Towne Center for $50.2 million, Mesa Ranch Plaza for $17.6 million
  • Largest retail submarkets: East Valley, North Phoenix, West Valley, Northwest Phoenix

Learn more about Phoenix retail property for lease.

Phoenix Multifamily Market

Substantial population and job growth are increasing the demand for multifamily housing in Phoenix. Rental rates are up, vacancy levels are down, with nearly 50,000 units changing hands at an average cap rate of 5%.

  • Total housing units: 1,970,654
  • Renter occupied: 35%
  • Total multifamily units: 472,957
  • Average asking rent: $1,457
  • Annual rent growth: 20.5% year-over-year
  • Vacancy rate: 4.7%
  • New construction: 7,972 units delivered in 2021 with 23,799 units currently under construction
  • Recent sales: Ascent at Kierland & Elite North Scottsdale for $312.5 million, Tides on Mesa and Tides on Southern for $217.5 million
  • Median household income: $67,896
  • Per capita income: $34,074

Learn more about Phoenix multifamily property for sale.

How Crexi Connects Buyers and Tenants to Phoenix Commercial Properties

Phoenix commercial property listings are only a few clicks away for buyers and tenants seeking their next CRE investment. As Arizona’s capital and one of the fastest-growing economies in the US, Phoenix represents a resilient and opportunistic center to explore commercial real estate options. 

Once the perfect property is found, buyers and tenants can connect to the listing broker with a few clicks. Crexi also features quick-download OMS, brochures, and the option to submit a letter of intent (LOI) through its safe platform.

Intelligence Equips Investors with Data and Market Knowledge 

Knowing Phoenix investors and tenants want to make the best CRE decisions, Crexi Intelligence provides a robust, third-party-vetted database to inform buyers and tenants alike. 

Crexi Intelligence is a subscription-based database and property research enhancement tool that equips investors and tenants with thousands of third-party-verified sales comps and in-depth market information. With Intelligence, buyers and tenants can instantly access regional trends and detailed demographic insights on every property’s page.

Intelligence is available to buyers, sellers, and tenants on a subscription basis.

How Phoenix Brokers Thrive with Crexi

Crexi’s online marketplace features nearly 7,000 Phoenix properties for sale and for rent in the broader metro area. Industrial and medical offices are among the most popular Denver property types, attracting investors seeking favorable cap rates and IDing selections for 1031 exchanges.

Phoenix commercial brokers harness Crexi’s CRE tech suit to directly connect with buyers or tenants interested in Phoenix’s commercial property market. Brokers can easily list a variety of properties throughout the Valley of the Sun, including:

  • Offices
  • Industrial buildings
  • Retail units
  • Land parcels
  • Multifamily developments
  • Mixed-Use facilities
  • Hospitality properties
  • Non-traditional buildings such as data centers, self-storage, etc.

Crexi’s powerful, simple-to-use CRE software enables Phoenix brokers to guide their listings from list to close quickly. Brokers can monitor buyer and tenant behavior in real-time, determine outreach strategy with Crexi’s lead scores, and connect fast with the most promising leads in a few clicks. Brokers can also securely store due diligence files and other paperwork in Crexi’s secure file vault.

While Crexi’s free broker tools are robust, brokers unlock the true capabilities of Crexi with Sale PRO, Lease PRO, and All PRO

Crexi PRO Dashboard 2020

Crexi’s All PRO Membership

Phoenix brokers utilize Crexi Sale PRO and Lease PRO to accelerate and simplify their workflow and win more deals. PRO subscriptions feature a robust lead management system with highly detailed lead data, connecting brokers to already interested, actively-seeking leads.

PRO also improves collaboration and operations across teams with branded, downloadable lead reports. Listings with PRO receive preferential placement at the top of search pages, where buyers and tenants seeking Phoenix commercial property see them first.

Crexi sends out weekly emails to its database of hundreds of thousands of buyers and tenants across the US, curating a list of PRO properties based on each lead’s behavior on the platform. These machine-learning-powered emails win higher engagement of up to 10-15% average click-through rates.

PRO members also can access the Intelligence’s database at no additional cost, gaining access into millions of sales comps and property records.

Brokers — including those in the wider Phoenix metro area — use Crexi PRO to engage with the more than 280,000 leads searching for Phoenix commercial real estate and over 12.5 million leads nationwide added to Crexi in 2021. 

On average, PRO brokers win 125% more leads and close up to eight times more deals than non-PRO users.

Contact support@crexi.com to learn more about All PRO.

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Shanti Ryle
Shanti Ryle

Content Marketing Manager

Shanti leads Crexi's content marketing strategies with 7+ years of content development experience, creating everything from blog posts to award-winning podcasts. Previously, she worked on content teams at Snapchat, Weedmaps, and HopSkipDrive as well as developed copy, articles, and media for freelance publications.

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