[Source: Cathy Luebke, Phoenix Business Journal] — The office vacancy rate has increased for the ninth consecutive quarter in Phoenix to 24.2 percent. That also marks the highest point since 1992 when total office space stood at 43 million square feet compared with today’s 74 million tally, according to CB Richard Ellis third-quarter MarketView report. A year ago office vacancies accounted for 17.1 percent of the market.
West Phoenix has the highest rate of vacant space, 39.2 percent; the central business district has the lowest, 15.7 percent, according to CBRE.
“Uncertainty in the economy has significantly impacted tenant activity in the metropolitan Phoenix office,” the report said. “However, for those companies that are in the market for space, they will have multiple opportunities from which to choose at extremely competitive pricing.”
The average asking price per square foot on a full-service lease for existing buildings was $23.44 as if Sept. 30, according to CBRE. That compares with $24.96 in the first quarter and $25.96 at the end of 2007. Nevertheless, construction continues. CBRE reports 1.9 million square feet of space expected to come online by first-quarter 2010. More than half in downtown Phoenix. That compares with 4.6 million at the end of 2007. [Note: Read the full article at Phoenix office vacancies tie 17-year high.]
[Source: Jahna Berry, Arizona Republic, March 3, 2009] — When light-rail construction scared off scores of shoppers, many struggling downtown merchants considered the $1.4 billion line more of a curse than a blessing. Light rail began running in December, and what a difference a few months has made. Last week, several downtown business owners lobbied a transit agency to make sure that their shops would sit near a future light-rail route. Metro appeared before an influential downtown business group to talk about plans for a light-rail span that would link West Phoenix, the state Capitol, and downtown in 2019.
Metro is weighing several possible routes on the west end of downtown Phoenix. One option would put tracks on Jackson Street. Another alternative would use Washington and Jefferson streets, Metro officials told the Downtown Phoenix Partnership.
- Dale Jensen and David Wallach, two of the businessmen behind the proposed Jackson Street Entertainment District pushed for the Jackson Street option. The city wants an entertainment district, and a Jackson Street light-rail route makes sense, Wallach said.
- Bill Smith, who owns four downtown restaurants, including Stoudemire’s Downtown, argued for the Washington-Jefferson option. All of his downtown restaurants sit near the Washington-Jefferson corridor. “I have to disagree with my brother, Dale Jensen,” Smith said.
The banter was playful, but the stakes are high. Metro recently announced that initial daily light-rail ridership was nearly 20 percent higher than expected. About 30,000 boardings — one-way trips — are made each day. If a business is located near the future light-rail line, those trains could bring thousands of potential customers. [Note: To read the full article, click here.]
State Archives employees seek volunteers to help finish preparations for the move to the new Polly Rosenbaum Archives and History Building, southwest of the State Capitol at 19th Avenue and Madison. Volunteers are needed on Thursday, September 18 and Friday, September 18 at the existing off-site storage facility. To volunteer, please call 602-926-3720.
The public is invited to attend a presentation by the Maricopa County Air Quality Control Department on compliance by Paramount Petroleum in the wake of a May 1 explosion at the company’s west Phoenix plant.
- Date: Thursday, August 14
- Time: 6 p.m.
- Place: Phoenix Elementary District #1 Governing Board Room (turn south off Palm Lane, just east of 7th St., meeting in northeast corner of the campus)
On May 1, Phoenix firefighters and hazardous materials crews responded to an explosion at a Paramount Petroleum plant, near 19th Ave. and McDowell Rd. At the time of the explosion, Victor Rangel of the Phoenix Fire Department, said, “There appears to be a large tank that had raw asphalt product in it. That caught fire and exploded. At this point, we have no injuries.”
Rangel said no structures were threatened. Firefighters were trying to keep the fire from spreading to other tanks. No evacuations were ordered.
According to KTAR Radio, it was a frightening situation for businesses located near the tank that exploded. Josh Scott runs Renovated Metals, about 100 yards from the tank that exploded. His workers heard an explosion. The ground shook. Then police evacuated the employees. “A huge boom and they said sulfur, it smelled like sulfur pretty bad, so they’re all a little shaken up,” Scott said. “The shock waves scared them pretty much. The police came in and evacuated them, so we took them to our other yards.”
Phoenix fire ladder trucks sprayed thousands of gallons of water on the tank to cool it down and keep it from spreading to several other tanks nearby. “So many cylinders over there if it spread. I just want to be safe and make sure my guys are safe. When the fire department clears it and lets them back then we’ll open back up,” Scott said. There’s no word yet on what triggered the explosion.
[Editor’s Note: Within a mile of the explosion site are five schools — Capitol Elementary School, Magnet Traditional School, Franklin Police & Fire High School, Horizons Back-to-Basics School, and Metropolitan Arts Institute. Within two miles, there are 39 schools.]
[Source: Peter Corbett, Arizona Republic] — …In the second quarter, metropolitan Phoenix experienced a negative absorption of office space for the first time in 20 years, according to a CB Richard Ellis market report released last week. That means that instead of tenants filling more new office space, the market actually had less space occupied. In this case, the negative absorption was 171,278 square feet. Office vacancies hit 16.3% in the quarter ending June 30, up from 13% a year ago.
- Central Phoenix, with 1 million square feet of office space under development, is gaining some renewed vitality in the office sector with development of ASU’s downtown campus and the Metro light rail scheduled to start service by year’s end… Office vacancies in downtown Phoenix were at 13% in the second quarter.
- Scottsdale’s overall vacancy rate was 17.7%. But there has been a huge spike in office vacancies in the past two years. Central and southern Scottsdale have been less volatile, but vacancy rates are up about 5% in both areas over the past two years.
- West Phoenix, a relatively small office market, has a vacancy rate of 37%.
- Southeast Valley’s rate is 19%.
Building owners are offering concessions, and there has been fierce competition to land tenants, said Jerry Noble, a CB Richard Ellis senior vice president who tracks office market. Lease rates for the Valley’s existing office space fell to $25.71 in the second quarter from $25.95 at the end of the first quarter. [Note: To read the full article, click here.]
[Source: Catherine Reagor, Arizona Republic] — Metropolitan Phoenix’s foreclosure problem has spread. Many Valley neighborhoods closer in, particularly in south, west, and central Phoenix, now have the highest foreclosure rates, according to an Arizona Republic analysis of real-estate data from the Information Market. Foreclosures across metro Phoenix number 16,647 for the first half of the year compared with 9,966 during all of 2007 and 1,070 in 2006.
Last summer, when foreclosures were just starting to climb, the highest rates of home defaults were found on the Valley’s more affordable fringes. The problem worsened, hitting a wider swath of homeowners who bought at the peak of the housing boom through subprime loans. Although some of the Valley’s fringe areas such as Surprise, Anthem, and Buckeye continue to have high foreclosure rates, the problem has moved inward. “It has become more of an equity problem than a subprime problem,” said Tom Ruff, a real-estate analyst with Information Market. [Note: To read the full article, click here. What’s the foreclosure rate in your zip code? Click here to find out.]
The next meeting of the Valley Metro Downtown Community Working Group to discuss transit expansion planning from downtown Phoenix to 27th Ave. will be held on Wednesday, July 23, 2008 from 6-8 p.m. at Metro’s office (101 N. 1st Avenue, #1300).
Interested individuals are encouraged to attend and voice their opinion. Contact Monica M. Hernandez, Valley Metro Area Coordinator, by e-mail or phone at 602-322-4427 to confirm your participation at this meeting. There is no need to respond if you have already confirmed your participation.