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Colliers 2021 Q2 Greater Phoenix Medical Office Market Report

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Q2 2021 Medical Office Market

Key Takeaways
  • Year-to-date net absorption is up to 173,311 square feet
  • Banner Health delivering 128,000 square feet of the 150,500-square-foot new supply of the quarter
  • Rental rate rose to $23.05, increasing 6 percent year-over-year     

Net absorption for second quarter was 206,449 square feet in Greater Phoenix, recovering quickly from last quarter’s negative absorption and bringing 2021 year-to-date net absorption to 173,311 square feet.

Rental rates continue to rise as a healthy reflection of the medical office building market, increasing 6.1 percent year-over-year, ending at $23.05 per square foot.

Two new buildings were completed this quarter totaling 150,500 square feet, with a low vacancy of 8.7 percent. Another 231,000 square feet of development is underway.

Transaction volume during the second quarter increased with 15 transactions, totaling nearly $66 million that brought year-to-date volume to $150 million.


The rapid growth of Phoenix, coupled with the pro-business guidance from Governor Ducey, has helped Phoenix maintain a strong economy.

Phoenix will continue to see more growth in the medical sector as universities align with cutting-edge research to grow the overall ecosystem and fuel demand for space.

The price of land has increased throughout 2021, and will be reflected in future rental rates.

Medical Office Market Colliers International in Arizona

Colliers 2021 Q2 Greater Phoenix Medical Office Market Report

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Phillip Hernandez

Director, Research | Arizona


As research manager for Colliers in Arizona, Phillip Hernandez is responsible for proactively developing and implementing research objectives and directing all research activity for the Arizona offices.

He provides 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. Phillip analyzes and interprets real estate trends and maintains a database of economic indicators to provide forecasts.

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

Focusing on business development, he leverages market intelligence and insights for thought leadership content strategy in support of client engagement. His 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 Phillip as a brilliant storyteller and a passionate, creative and experienced professional.

Prior to joining Colliers, he served as a business analyst at CBRE, where he specialized in creating tailored research reports, as well as unique and interactive applications and dashboards that elevated the market position of assets. Phillip delivered weekly research updates, with relevant lease and sale comps, custom competitive sets and current market activity.

He 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. He also led weekly department research meetings to develop initiatives surrounding market trends, produce innovative industry solutions and analyze client-centric objectives.

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

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