Phoenix-area office market shows life with new projects

Although the metro Phoenix office market continues to struggle, it performed well enough during the first quarter to prompt a handful of office developers to announce plans for new projects, commercial real-estate analysts said. Overall, the office-leasing market fared better in the first quarter than it had during the same period since 2007, said Chris Jantz, vice president of research at Cassidy Turley BRE Commercial in Phoenix. It was also the first quarter in years in which a handful of office developers announced new projects, including Hayden Ferry Lakeside III in Tempe and SkySong III in Scottsdale. Jantz said the Phoenix area's overall office-vacancy rate is still uncomfortably high at 28.2 percent for privately owned, multi-tenant office properties of at least 20,000 square feet. That's down just a hair from the 28.3 percent vacancy rate reported for the same properties in the first quarter of 2011, he said.

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