**CBRE Reports Q3 2025 Market Performance for Phoenix Industrial, Office, and Retail Sectors**
Phoenix’s commercial real estate markets demonstrated strong performance across industrial, office, and retail sectors in the third quarter of 2025, according to a new report released by CBRE.
**Industrial Sector**
The industrial market recorded a robust net absorption of 6.4 million square feet in Q3 2025—the highest level since Q2 2022. Despite this surge in demand, asking rents dipped slightly to $1.07 per square foot on a triple-net basis, reflecting less than a 1% quarter-over-quarter decrease. Vacancy rates continued a downward trend, falling by 90 basis points. This marks the first time since 2022 that the market has seen consecutive quarters of declining vacancy.
**Office Sector**
In the office market, Phoenix posted 212,669 square feet of positive net absorption in Q3 2025. The vacancy rate edged down by 30 basis points to 21.8%. Meanwhile, the average full-service gross direct asking lease rate rose 0.9% year-over-year, reaching $31.73 per square foot.
**Retail Sector**
New construction in the retail market added 269,621 square feet in the third quarter, with an additional 1,229,718 square feet still under development. The sector saw strong leasing activity, with 358,329 square feet of positive net absorption and 1,506,969 square feet of gross absorption for the period. Retail vacancy dipped by 10 basis points to settle at 5.1%.
The Q3 figures reflect continued momentum across all major commercial sectors in Phoenix, underlining the region’s resilience and growing appeal to investors, developers, and occupiers.
