Navigating the 2026 Phoenix Metro Industrial Market Shift: Strategies for Tenants Before Renewing or Relocating.

Renee Ervanian
Apr 13
1 min read

Updated: 4 days ago

The headlines are changing. Office vacancy rates have significantly decreased. But what Tenant's don't see is that a lot of office buildings are disappearing because they are being torn down and/or converted to residential apartments and condos. Statistics can be misleading. Tenant rep brokers, research and actual absorption numbers are necessary now. — Is Office Demand or Demolition creating a surge in Office Absorption?

Office vacancy is dropping, but not necessarily because demand is booming. 23.2 million square feet of office space has been demolished or converted to residential condominiums and apartments. Instead of a leasing surge in office, it is more of a structural rebalancing. Tenants still have leverage, especially in Class B and older buildings. because falling vacancies are being driven by building removals, not tenant demand.

A tenant rep broker is essential for identifying where leverage exists and converting this into tenant concessions.

https://www.bizjournals.com/tampabay/news/2026/04/10/office-residential-conversion-real-estate.html

https://www.bizjournals.com/phoenix/news/2026/04/14/office-conversion-wells-fargo-golf-supply-woes.html

https://www.bizjournals.com/phoenix/subscriber-only/2026/03/20/here-are-80-of-phoenix-areas-largest-construction-projects.html

https://www.bizjournals.com/phoenix/news/2026/04/13/corporate-headquarters-cities-ranking-phoenix-cbre.html