Office Landlords Rule
We spoke with CBRE office services EVP Jim Fijan about the office investment market in Phoenix and how “the market continues to get better.” (Investment is like chicken soup for an asset class.) It's a good time to be an office landlord; rents are finally pushing up with positive absorption for the past three years averaging 2M SF leased. “Everybody is getting a lift in value in their property whether they’ve had a significant increase in occupancy or not.” (What better way to celebrate than fly fishing in Utah.)
Last year, Jim sold some $350M in a dozen transactions, the largest of which was Scottsdale Galleria, at $68M. But with the market tightening, developers are getting spec ready—and already a handful of office projects are coming out of the ground. (Every few years they rise from the ground like cicadas.) Could the industry kill the golden goose? “It's not going to be a runaway spec development like it was,” Jim says. “I can't foresee that happening.”
