The “Coffice”

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In our ongoing discussion about the future of office space, here is a nice stat:  In this cycle, office space users have been taking approximately ½ of the space they took as they grew in the last cycle.  We know why—open office, the explosion of the tech companies and shared space environment and all the […]

Suburban Offices are Back

Suburban offices

First, let me say, I told you so.  I have been saying for some time that the huge shift to urban core will not be sustained.  There are companies that want/need to have that environment so I am still bullish on urban cores, but there are others who will reverse the three-decade trend of moving offices closer and closer […]

2018 Top 10 Issues Affecting Real Estate

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The changing demographics of workers in the U.S. is HUGE and it’s changing everything. This is probably the biggest issue we are facing in office space leasing, and it features predominantly on the 2018  Counselors of Real Estate (CRE)  Top 10 Issues Affecting Real Estate. Below is the release and a link to the full report. I […]

1-Minute Phoenix Metro Office Update: Q2 2018

Q2 2018

Readers of this narrative know that I am an office broker who works every day helping Tenants and Landlords navigate the nuances and opportunities across geographical areas and product types.  I (along with my incredible team) am based in Phoenix but work around the country and internationally as well. We get hired for all kinds […]

Commercial Real Estate Designations

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  I come from a family of educators.  Both my parents were school teachers.  After getting my bachelor’s degree, I felt the need to continue my education.  Today I have earned my MBA and the three most prestigious designations in the Commercial Real Estate industry: CCIM, CRE, and SIOR.  Andrew has earned the same three designations.  […]

The Rise of Collaborative Workspace

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I have been representing tenants across the US and overseas for 34 years.  As I write this narrative, I want to provide value, spot trends and get business.  If you have a question or need office space, call me.  We would love to work with you.  One huge trend that has had a meteoric rise […]

The Highest Taxed Buildings in America

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In many ways, I am jaded after being in the CRE brokerage business for so long.  Representing office tenants means you get to see just about everything. But I also live in an Arizona bubble most of the time. So I was SHOCKED at the amount of property taxes that the highest-taxed buildings in America […]

1-Minute Phoenix Metro Office Update: Q1 2018

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The long and stubbornly slow recovery continues.  Q1 2018 numbers are out and the Metro Phoenix office market absorbed 686,469 square feet of net positive space, lowering overall vacancy to 19.39%.  We are now into the 8th straight year of positive absorption in office jobs.  Vacancy varies throughout the Greater Phoenix area with a high of 30.5% in the Sky Harbor […]

Underlying Organizational Costs

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The biggest waste we consistently see is clients underutilizing their office space.  Planning for growth that never occurs, thinking you “need” the space for visiting people, and making work areas and offices too big — there are multiple ways that companies waste money. Office space, and even more important facilities, can significantly reduce costs through […]

Businesses are Relocating to AZ

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It’s always warm in Phoenix.  In the summer, we go above 110 degrees on a regular basis. On the other hand, the Phoenix office market continues to move along at a steady pace…like it’s 70 degrees.   BUT, all is not lost.  Many companies are beginning to realize the true cost of having all their […]

1-Minute Phoenix Metro Office Update: Q4 2017

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Positive and Steady. That’s how I would describe the Metro Phoenix Office market’s performance for 2017.  The market posted its 7th straight year of positive net absorption (net gain in office jobs) finishing at 1.83 million SF. For reference, our 25-year average is 2.5 million SF, and 2016 net absorption reached 2.9 million SF.   […]

How High-Net Worth Investors Invest in CRE

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As the wealthiest people in the world continue to grow their wealth, they are looking more and more at Commercial Real Estate for their portfolios.  We are now seeing the uber-wealthy put 6-25% of their portfolio into CRE.  This is a big trend because the rich are getting richer.   Here are a few stats: HNWI’s […]

10 Issues Affecting Commercial Real Estate 2017

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One thing I constantly stress to my team is that to be successful in this industry, you have to be willing to learn and adapt to the times, or quickly become obsolete and watch your business disappear. As a 20+ year Counselor of Real Estate (CRE), I love our annual top ten issues affecting commercial […]

1-Minute Phoenix Metro Office Update: Q3 2017

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The Metro Phoenix office market continued on its eight-year positive course, albeit at a slower pace, for the 3rd quarter of 2017. As any athlete will tell you, a win is a win and all the [market] players will take it.  The 216,037 SF of office space absorbed fell short of expectations, however, some large leases were […]

Traditional Retail is Dead

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By next year, 36 million square feet of retail space could be vacated and returned to the market. It’s official – the global landscape of retail is changing and changing rapidly. These changes are driven by a combination of growing e-commerce use and a demographical shift in consumer behavior, which prioritizes experience over tangible goods. […]

US Apartment Rents are CRAZY

Apartment Rents

Remember what you paid as rent for your first apartment? That first rent payment probably felt like a real dent in your paycheck. But I guarantee you it’s not anything like today’s rents.  Apartments have been on fire for a LONG time this cycle. While I think there is still room for this market niche to […]

2-Minute Phoenix Metro Office Update: Q2 2017

Q2 2017 Office Report

The second quarter was not quite as busy as the first, but there is still good news as our market slowly (painfully slow) continues to improve.  Vacancy held steady at 18.8% despite new construction, and we continued our streak of continuous positive net absorption (job growth).  We haven’t had negative net absorption since 2009. The pace of […]

5 Frequently Asked CRE Questions

5 Questions about real estate

estate are simple. A tenant needs office space. An owner needs to lease their space to a tenant. But once you get into the details of the transaction, things become complicated really fast. A good amount of my time working with clients is spent answering their questions. I even wrote 2 books on the subject […]

Office Lease Checklist

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Whenever a client has a problem with their space or lease agreement, 9 times out of 10 we can trace that negativity back to one thing: a communication failure in the original lease negotiation. Leases are unfamiliar territory for many of our clients. Most of the time, they just don’t know the right questions to ask. Below […]

1-Minute Phoenix Metro Office Update: Q1 2017

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Q1 2017 was a very busy first quarter! Metro Phoenix office market experienced 800,000 SF of positive net absorption. Annualized, this puts the market on track to absorb 3.2 million SF for the year, and 700,000 SF over our 25-year average.   Vacancy in the first quarter essentially stayed flat at 18.9%, due to new building […]

1-Minute Market Update: Q4 2016 Report

Q4 2016 Office Report

The Metro Phoenix office market’s health continues to improve. Net absorption (job growth) of 2.93 million SF mirrored 2015 figures, which helped push vacancy down to 18.6% (from 19.5% at the end of 2015). Overall, lease rates are higher than they were a year ago with a current average of $24.34/SF Full Service. Rental rates still […]

Why We Still Need Office Space

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Starbucks is not office space. Sure you can have a meeting, grab a coffee, and check your email, but it’s not a real office. There are tons of new co-working or shared office concepts. And yet, office space is not going away. Below is a short and sweet article that gives a few reasons why.  My top takeaways on why […]

CRE Crowdfunding

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Crowdfunding Commercial Real Estate acquisitions is all the rage. However, like everything, there are opportunities and liabilities in placing your investment dollars in a crowdfunded deal.   Below are two different articles with highlights. But first, a quick summary: Liabilities: Investors lack the industry knowledge and experience needed for real estate investments Too many uncommitted investors High legal fees […]

Suburban Office Markets

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The current recovery has been anemic, not just economically but in terms of new office construction as well. Long term, the lack of new buildings is good as overbuilding is not a concern. With the emergence of millennials in the work force and live/work/play environments,  suburban office markets have been even slower to recover. As the Central Business District […]

Metro Phoenix is Getting Better…Slowly

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Steady net absorption (more space being leased due to job growth) continues to chip away at Metro Phoenix’s office vacancy as we head into Q4 2016. This quarter, Phoenix benefitted from medium-sized companies expanding. We hope these companies continue to grow. The metro Phoenix office market is on pace to perform roughly the same as 2015, i.e. […]

Political Real Estate Issues

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Below is a great summary of political issues facing the real estate industry.  I have highlighted some key issues specifically for commercial real estate.  These include:   Ongoing tax reform may make “Like Kind Exchanges” more difficult to close and lose tax benefits drying up volume. New standardized accounting principles for leases could decrease cash […]

Positive and Steady: Q2 Office Market Insight

Q2 Market Report

Positive and steady. Those are the two words I would use to describe the office leasing market in Metro Phoenix as of mid-year 2016.  The numbers in the below report also reflect this sentiment that I see every day on the streets of the market.  Across the entire portfolio of buildings my team leases, we […]

Understanding The Office Market: Q1 2016 Phoenix Office Report

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Office leasing is off to a good start in 2016.  Here in Metro Phoenix, the market saw 641,000 square feet (SF) of net absorption (office jobs added) recorded in the first quarter.  This means Metro Phoenix is on track to absorb approximately 2.5 million SF for the year. That would mean another year of consistent, average […]

How Do Star Wars and the Phoenix Office Market Relate? Q4 2015 Phoenix Market Report

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Seeing Star Wars Episode VII: The Force Awakens recently I cannot help but draw a parallel to the world of Metro Phoenix office leasing. Why? Because, like “the force,” net absorption awakened in 2015 posting 3.4 million square feet. This is the highest absorption since 2005 and has pushed our vacancy rate below 20% for the first time in eight years. (By […]

Trends in Square Feet per Office Employee

Trends in Square Feet per Office Employee

It’s no surprise that square feet per office employee is declining. The open office concept is changing the world and the biggest user of office space in this cycle is…..Tech companies. But this trend has been coming for a long time; see the graph below. In addition to the SF per employee graph there are […]

Market Insight: Q2 2015 Phoenix Office Report

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Like the national office market, the Metro Phoenix Office Market is rebounding at a gradual pace. Last week Craig sent out a good update on the national office market from The Wall Street Journal. (Click here for his narrative in case you missed it) Today I’m sending you an update on the progress we’re seeing in Phoenix. The WSJ article mentions […]

Office Market Is on a Slow Roll

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I just got a peek at our Q2, 2015 Metro Phoenix office numbers and once again we are mirroring the national office market. It’s a methodical and frustratingly-slow recovery. Andrew will highlight Phoenix in the next few weeks, but today I am focusing on the National office market. Below is a nice Wall Street Journal update on the national […]

Operating Expenses? Yes! And It’s Important.

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For the past 30 years we have been analyzing operating expenses for the tenants we represent. It’s vital for tenants to understand how operating expenses work because this is a huge potential long term and expensive hidden cost. Here are a few items to watch out for in a tenant lease: –Not getting a grossed […]

In The Know: Phoenix Office Report Q4 2014

A lot can happen in a year. Our fourth quarter 2014 Phoenix Office Market Report came out last week and it looks noticeably different than our Q4 2013 report. Below is a link to the report and here’s a brief summary: The metropolitan Phoenix office market absorbed 620,000 net square feet (SF) in Q4 to push […]

Market Insight: Q3 2014 Phoenix Office Report

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Finally, some good news. The Metro Phoenix Office posted just under 800,000 SF of net absorption for the third quarter. A significant number of the tenants I talked to while canvassing buildings have either just expanded or are considering expanding in the near future. Despite the strong absorption, vacancy remains high at 21.6% across the entire market. Except for […]

Market Knowledge: Phoenix Office Report Q2 2014

The Phoenix office market continues to slowly improve. Too slow for my taste, but improvement is always good. Unless you are in Tempe, Chandler or Scottsdale, the market is not improving as fast as owners and investors would like. Lee & Associates Arizona released its second quarter Office Market Update in July and showed that success these […]

A Look at the Numbers Behind the Current Headlines About Job Creation

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Job creation news made headlines a few weeks back touting that the United States had recovered all of the jobs that were lost during the great recession. In Arizona, however, we are still way behind our pre-recession levels. Over the next two weeks, we are going to try to tie jobs, the Phoenix office market, […]

Market Insight: Phoenix Office Report Q1 2014

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Want to know the latest trends in the Phoenix Office market? Here’s what’s going on: Our first quarter Office Market Report was just released this week with some interesting stats. We had an excellent quarter for net absorption, the most important measure of the market’s health. We absorbed 727,000 SF, and if we keep that pace up, […]

Thoughtful Outlook for Office Space in 2014

Annually, I review a large number of commercial office research. Below is a link to the UBS Global Asset Management US Real Estate Market Outlook 2014. With all of the cumbersome reports published, I find this one to be very concise and insightful. The entire report is 28 pages but we have included the key office pages below. Many trends […]

Q4 2013 Office Market Report

Our fourth quarter 2013 Office market absorption numbers came out last week. A short summary: We are making progress but absorption fell below expectations. We concluded the year just under 1.3 million SF of net (not gross) absorption. Net absorption is the true measure of a market’s performance. The net absorption in 2013 was down 36% from 2012, however, we beat […]