### Phoenix Office Market Sees Positive Absorption, Declining Vacancy
The Greater Phoenix office market recorded its highest net absorption in two and a half years, along with a decrease in vacancy, according to a recent report by **Colliers**. Reduced construction activity resulted in the lowest level of new office inventory in over a decade.
Net absorption in the final quarter of 2024 was driven by owner-user acquisitions. Major transactions included U-Haul, Cardon Ventures, and D.R. Horton, totaling more than 600,000 square feet. The fourth quarter saw 358,118 square feet of positive net absorption, though the total annual net absorption remained negative at -928,923 square feet.
Office leasing activity gained momentum, with over 500,000 square feet of new direct leases signed during the fourth quarter—a 33.4% increase compared to the same period in 2023.
For the first time in 18 months, direct market vacancy declined, settling at 15.3%. However, vacancy increased year-over-year by 40 basis points. Overall space availability rose slightly by 10 basis points year-over-year, closing 2024 at a 19.5% vacancy rate.
