Rising Like a Phoenix

The rebirth, transformation, and renewal of obsolete office space in Metro Phoenix

Phoenix’s office sector is entering a new chapter. With vacancies still elevated and aging buildings struggling to compete in a tenant favored, hybrid work environment, conversions and demolitions have emerged as a key mechanism bringing supply and demand back into balance. From residential to industrial redevelopment, these projects are repositioning obsolete assets and removing excess supply, supporting long-term market stabilization.

Five quick takeaways:

• Record Redevelopment: 3.3MSF across 37 office buildings converted or demolished since 2024.
  
• Strong Removal Pipeline: 4.1MSF of additional office removals are currently proposed.
  
• Policy Tailwinds: Recent policy upgrades are lowering barriers to converting offices to alternative uses. 
  
• High Geographic Concentration: Over 80% of the space slated for redevelopment is located in just five submarkets. 
  
• Vacancy Could Tighten: If all proposed conversions and demolitions proceed as expected, office vacancy could decline by an estimated ~110 basis points.