1-Minute Phoenix Metro Office Market Update: Q3 2025

Valued Customer– The Greater Phoenix Office market took a solid step forward in Q3 with 120,000 SF of positive net absorption, pushing year-to-date totals to 571,000 SF. That’s the strongest YTD number we’ve seen since 2021 and a clear sign of recovery starting to take shape.

Sublease inventory dropped again — now sitting just over 5 million SF, a 12% decline from Q2 and the lowest level in years. Vacancy dipped slightly to 19.5%, and lease rates held flat at $29.81/SF.

Here’s the link to the full Q3 Report, and as always, here are my three takeaways:

— The recovery is real (but measured): Positive net absorption and back-to-back sublease drops tell us tenants are returning to the office — slowly, but consistently. The 571,000 SF YTD net absorption is a strong indicator that this is more of a trend than a fluke.

— It’s still a tenant’s market: Overall Vacancy is hovering near 25% when you include sublease space. That means tenants generally continue to hold leverage — especially outside of Class A or trophy assets.

— Build-to-suits only…for now: Construction activity sits at 527,530 SF between four projects in town, but none of it is speculative. New development is on hold unless a user has a customized need —  or unless a development has a compelling story…

The market’s not roaring back — but it is quietly rebuilding. Regardless of your position in the market, let’s connect if you need some advice.