Central Arizona Real Estate Outlook Is Upbeat

Commercial real estate side is up with the economy...

The Arizona Republic reports on Metro Phoenix's improving commercial real estate market. Speakers at a recent forum sponsored by the Arizona School of Real Estate & Business were generally upbeat about the Phoenix-area commercial market.

Pete Bolton, a managing director at CB Richard Ellis, broke down the market as follows. Office vacancy was at 14.5 percent, compared with 18.38 percent at the end of 2003. Residential condo development is hot, and higher land prices are driving conversion of existing buildings into office condos. Downtown Phoenix is now a hot office market. Retail is hot and will stay that way as population growth and new housing create demand for new shopping centers. Retail vacancy fell below 6 percent and could drop below 5 percent by the end of the year. The Industrial market is challenged by increasing construction costs, a limited supply of affordable land and constraints in rail capacity.

"Any place that has Phoenix's new light rail system is going to see a lot more stuff coming to them," Bolton said. Investment brokers said Phoenix has become a national headliner as an investment market, especially since the stock market has lagged. Investors like the stability of big-name tenants that they expect to be in business for a long time. More...