BOOMING MARKET SET TO STRENGTHEN
Office, retail, industrial and other types of commercial real estate in the Phoenix area generally are on track to strengthen gradually over the next six months, according to a recent survey of brokers.
Responses to the survey conducted by Arizona State University’s W.P. Carey School of Business point to improving confidence.
“Growth continues, projects are getting done and they are in line with demand,” said Mark Stapp, executive director of the W.P. Carey Master of Real Estate Development program, in a prepared statement. “There is also an indication that the recovery is beginning to spread to sub-markets previously unaffected, meaning benefits are becoming more widespread.”
The March survey elicited responses from 180 commercial real-estate agents and brokers, 59 percent of whom said the local market is in an expansion cycle. Only 37 percent said uncertainty surrounding the federal government is affecting commercial real estate, continuing a downward trend on this topic that began two years earlier.
Regarding the Valley’s apartment market, 67 percent of respondents said they expect rents will head higher over the next six months, though that was down from 100 percent in a survey last October.
In industrial real estate, 68 percent of participants predicted the metro area will see more speculative development,
Regarding office properties,84 percent of respondents said they expect vacancy rates will continue to decline, with nearly as many projecting rising rents over the next six months. None of the respondents believe that office rents will decline or vacancy rates will rise over that time frame.
In the retail market, 56 percent of respondents expected to see rising rents over the next half year.
Also, more than 80 percent of the brokers and agents predicted Valley land prices would continue to rise and interest rates on commercial loans would edge higher.
“Growth continues, projects are getting done and they are in line with demand.” MARK STAPP EXECUTIVE DIRECTOR, W.P. CAREY MASTER OF REAL ESTATE DEVELOPMENT PROGRAM