**CBRE Reports Strong Q3 2025 Performance Across Phoenix’s Industrial, Office, and Retail Markets**
CBRE has released its third-quarter market reports for the Phoenix metro area, highlighting continued strength and momentum across the industrial, office, and retail sectors in Q3 2025.
**Industrial Market Highlights**
The industrial sector experienced significant growth, with net absorption reaching 6.4 million square feet—its highest level since the second quarter of 2022. Despite the robust demand, asking rates saw a slight decline, dropping less than 1% quarter-over-quarter to $1.07 per square foot (NNN). Notably, the market’s vacancy rate fell by 90 basis points, marking the first consecutive quarterly decline in vacancy since 2022.
**Office Market Trends**
The office sector in Phoenix also showed signs of stabilization. Net absorption totaled 212,669 square feet, resulting in a 30 basis-point decline in the vacancy rate, which stood at 21.8% at the end of the quarter. Meanwhile, the average full-service gross direct asking lease rate rose 0.9% year-over-year to $31.73 per square foot.
**Retail Sector Performance**
Retail remained buoyant with 269,621 square feet of new deliveries introduced to the market during the quarter. Additionally, 1.23 million square feet of retail space was under construction. Positive net absorption reached 358,329 square feet, supported by 1.5 million square feet in gross absorption. The vacancy rate in the retail segment declined by 10 basis points, settling at 5.1%.
These results underscore Phoenix’s resilience and continued attractiveness as a commercial hub, driven by population growth and consistent demand across major property sectors.
