Phoenix Office Market Report

Office gains lose breadth. Phoenix’s office recovery grew more uneven in 2026 as leasing slowed and downsizing continued. Metro vacancy fell just 20 basis points year to date through June, largely due to inventory removals. Momentum faded in the East Valley and South-Central Scottsdale, while Central Corridor vacancy jumped 300 basis points to 26.5 percent. Most other submarkets held vacancy below 20 percent, with North Scottsdale and the Camelback Corridor emerging as bright spots. Camelback leasing rose nearly 50 percent year-over-year, helping vacancy fall over 200 basis points. Banner Health’s planned move from 300,000 square feet in Midtown to 67,000 square feet in Biltmore underscores the shift from older core offices to premium, well-located space.