PHOENIX — Almost a quarter of all office space in the Phoenix area is sitting empty.
New numbers for the first quarter of 2023 from CBRE, a commercial real estate investment firm, show the vacancy rate of commercial office space sitting at much the same place it has been since the start of the pandemic.
“A lot of the tech office employment, which drives growth in office-using space, either are not growing as fast, or are growing but working from home," Charlie von Arentschildt with CBRE said.
But von Arentschildt said the company's data also shows rents have increased for the office space that is being rented.
Von Arentschildt believes that signals a shift in the way companies are using and designing office space.
“As companies try to get employees back to the office, what they're realizing is you have to offer something good," von Arentschildt said.
Because many companies have transitioned to a work-from-home model with at least some of their staff, von Arentschildt said companies are looking for amenities in the office buildings they rent, modern and updated designs, and a location near high-traffic and desirable areas.
What that boils down to, von Arentschildt said, is that the 24% of vacant office space is most likely in older, less desirable buildings.
But CBRE's analysis shows the Phoenix area is doing better than some other cities struggling with office space. The San Francisco area currently has 30% of its office space unoccupied.
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