Phoenix area high-end office space renting for less

With more than one-quarter of the Phoenix area's office space sitting empty, owners of high-end office buildings have been beckoning to tenants inside less-desirable properties to "move on up" at little or no added cost. As a result, the loss of existing tenants has been exacerbated at the bottom of the office-space food chain, among the so-called Class C properties, while Class A and Class B office properties have gained tenants overall. What's driving that movement is intense competition among property owners to fill their available space at a time when few businesses are forming or expanding. "It's sort of a musical-chairs phenomenon," said Blake Hastings, senior vice president with the Office Services Group at Cassidy Turley BRE Commercial in Phoenix. Office-class climbing during a market downturn, which brokers generally refer to as "the flight to quality," has been around for as long as there have been recessions, said Pete Bolton, executive vice president and managing director of Grubb & Ellis Co. in Phoenix.

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