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Colliers 2020 Q4 Greater Phoenix Office Market Report

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Q4 2020 Office Market

COVID-19 cases spiked again as the colder winter months arrived in Arizona, but with the help of a business-minded governor, the state did not enter a second lockdown like many neighboring states had to unfortunately bear. The vaccine distribution provides a path to normalization, which should lead to an economic catch up and optimism for the year ahead to deliver pent-up growth.

From the peak of unemployment in April hitting an all-time high of 12.5 percent, metro Phoenix has gradually and diligently been moving in a positive direction. The area has recovered nearly 79 percent of the initial jobs lost. In the months of October and November the financial activities industry increased 0.24 percent and 0.82 percent respectively, compared to the same months last year.

  • Q4 posted 143,434 SF of negative net absorption, marking the market’s first quarter of negative net absorption following an astonishing run of 34 consecutive quarters of positive net absorption.
  • Sublease availability slightly decreased after reaching a pinnacle in third quarter; however, it still indicated an increase of 91 percent compared to Q4 2019.
  • The direct vacancy rates increased this past quarter to 13%, increasing 30 bps over the quarter and 80 bps over the year.
  • Office vacancy, overall, had been trending downward until last year, but is now in an upward path.
  • Under construction activity remained steady this quarter with buildings that had previously broken ground; however, no new projects were started this quarter.
  • Scottsdale Airpark submarket continues to lead development in the Valley with 785,111 SF, which are 45% pre-leased, marking a decrease from the previous quarter after Nationwide gave back over 170,000 SF of direct space.
  • Investment sales soared to over $570 million late in 2020, after lower sales in the first three quarters that reached only $647 million dollars combined.
Outlook: The outlook for the Greater Phoenix office market remains extremely optimistic. Phoenix is moving up to become a top tier market, competing with larger markets for corporate headquarters. There is strong, pent-up demand from companies that signed short-term renewals during the pandemic because of the unknown factor.

New construction will be delivered with a standard health certification to adapt to the changing environment, touchless technology will be available at premier buildings, and office density will decrease to allow for appropriate distancing.

Vaccine progress will remain a dominant market narrative throughout 2021. As confidence grows, we will see a transition year, moving back to services from goods, and to in-person from virtual. The scars of 2020 will remain vivid from businesses that did not survive.

In the midst of the COVID-19 outbreak, information and data is emerging at a quick and uneven rate. The information contained herein has been obtained from sources deemed reliable at the time the report was written. While every reasonable effort has been made to ensure its accuracy, we cannot guarantee it. No responsibility is assumed for any inaccuracies. Readers are encouraged to consult their professional advisors prior to acting on any of the material contained in this report.


Colliers 2020 Q4 Greater Phoenix Office Market Report

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Phillip Hernandez

Research Manager


As research manager for Colliers International in Arizona, I am responsible for proactively developing and implementing research objectives and directing all research activity for the Arizona offices.

I provide leading-edge, thought-provoking research and analysis of market data for use in producing quarterly statistical market reports for each property discipline, as well as other ad hoc reports, research projects and presentations. I analyze and interpret real estate trends and maintain a database of economic indicators to provide forecasts.

Regardless of the property type or sector, I believe each has a story to tell and that data provides the opportunity to redefine the narrative. With a background in location analytics, I am highly experienced in interpreting complex data sets. Using the latest technology, I developed a system to blend analytics with a visually attractive approach to bring data to life.

Focusing on business development, I leverage market intelligence and insights for thought leadership content strategy in support of client engagement. My goal is to strategically align research and business development efforts and present research in an easily digestible format that promotes Colliers’ market share and revenue growth.

Colleagues describe me as a brilliant storyteller and a passionate, creative and experienced professional.

Prior to joining Colliers, I served as a business analyst at CBRE, where I specialized in creating tailored research reports, as well as unique and interactive applications and dashboards that elevated the market position of assets.

I delivered weekly research updates with relevant lease and sale comps, custom competitive sets and current market activity. I provided complex market and trend analyses, monitored an extensive database of proprietary market data, and delivered custom quarterly and annual reports that were strategically positioned towards targeted clients. I also led weekly department research meetings to develop initiatives surrounding market trends, produce innovative industry solutions and analyze client-centric objectives.

Previously, I was a GIS analyst for the central region of CBRE. Working exclusively with top-performing markets, I created unique models that illustrated custom real estate datasets through location analytics. I produced high-quality geographic and demographic maps, and investigated multiple approaches to storytelling through map and market analytics.

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Casey Koziol



As a research analyst for Colliers International in Arizona, I deliver in-depth analysis of current market conditions and trends for brokerage professionals and their clients. I compile market statistics across all property disciplines, including industrial, office, retail, healthcare, multifamily and land.

Using various in-house and online resources, I prepare data and background narrative information for market reports, publications and proposals for use by brokers, staff and management to serve the interests of Colliers’ clients.

In support of sales, leasing and business development, I create compelling client-facing presentations that illustrate and interpret real estate and economic trends. I track and analyze all aspects of the commercial real estate market and leverage that knowledge on behalf of Colliers and its clients. I also maintain sales and lease comp databases, monitor tenants-in-the-market activity, and respond to ad hoc research requests.

Clients and colleagues describe me as an ambitious and results-oriented professional, who strives for service excellence. My commitment to integrity, collaborative approach and effective communications make me a valued partner to internal and external clients.

My background includes working with landlord and tenant clients, primarily in the industrial and education sectors. Prior to joining Colliers, I served as a real estate sales and acquisitions intern at Tucson Realty & Trust Company, where I specialized in identifying potential buyers and sellers for commercial properties in the Tucson metropolitan area. Accomplishments included locating a buyer for an industrial storage property in south Tucson and facilitating a 1031 exchange on behalf of a client.

I was also a marketing analyst intern for Keyser Commercial Real Estate in Scottsdale, where I supported business developments efforts thorough researching properties on CoStar for existing and potential clients for the tenant-focused firm.

Outside work, my interests and activities include international travel, professional and collegiate sports, open water diving (I am scuba certified) and a variety of adventure challenges. I am semi-fluent in written and spoken Spanish, after spending a semester in Spain.

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