**CBRE Releases Q3 2025 Commercial Real Estate Report for Phoenix**
CBRE has published its quarterly market report, detailing the performance of Phoenix’s industrial, office, and retail real estate sectors in Q3 2025.
**Industrial Sector**
The industrial market posted impressive growth, with net absorption reaching 6.4 million square feet in Q3 2025. This marks the highest level of absorption since Q2 2022. Asking rental rates saw a slight decline, dipping to $1.07 per square foot on a triple-net (NNN) basis—less than a 1% decrease quarter-over-quarter. Vacancy rates continued their downward trend, falling by 90 basis points. This is the first consecutive quarterly decline in vacancy rates seen since 2022, signaling strengthened demand in the industrial space.
**Office Sector**
The Phoenix office market experienced a positive shift, recording 212,669 square feet of net absorption in Q3 2025. Vacancy rates for office space declined by 30 basis points, closing the quarter at 21.8%. Additionally, the average full-service gross direct asking lease rate increased 0.9% year-over-year, reaching $31.73 per square foot.
**Retail Sector**
The retail market remained active, with 269,621 square feet of new space delivered during the quarter. An additional 1,229,718 square feet of retail development remained under construction as of the end of Q3. Net absorption came in at 358,329 square feet, with gross absorption totaling 1,506,969 square feet. Retail vacancy declined by 10 basis points, ending the quarter at 5.1%.
Overall, the Phoenix commercial real estate market in Q3 2025 demonstrated strong fundamentals across the industrial, office, and retail sectors, indicating a continued recovery and growth trajectory.
