Office-to-Industrial Conversions are shrinking the small tenant office supply.
Phoenix ofice vacancy has fallen for three straight quarters, but not because more companies are hiring - it's because roughly 8 million square feet of Phoenix office space has been designated for conversion to other uses since 2020. Older buildings have been pulled out of office inventory for redevelopment into housing or industrial space.
WHAT HAPPENS TO A TENANT'S NEGOTIATING LEVERAGE AS AVAILABLE SPACE DECLINES? As available space declines, negotiating leverage erodes. With fewer options on the market, landlords face less competition for their space, which means rental rates can climb and cost-saving concessions become more limited.
WHAT SHOULD A TENANT SHOULD DO THIS MONTH IF THEIR LEASE EXPIRES IN 2026 OR 2027? Engaging a tenant rep broker to prepare a preliminary market report identifying your best options. Building this knowledge base early lets a tenant negotiate from a position of strength rather than reacting under pressure and losing valuable concessions.
WHAT IS THE AUTHOR'S BACKGROUND?
Renee Ervanian is the Managing Broker of Core Commercial LLC, specializing in Metro Phoenix tenant and buyer representation, owner-user sales, acquisitions, and family legacy portfolios. With 20+ years of experience advising office, indusrial, and medical users across the valley, Renee is also known for her deep submarket expertise, negotiation strategy, and tenant/buyer-side advocacy, publishing often to help businesses avoid costly lease mistakes and negotiate from a position of strength.
Renee Ervanian
Managing Broker
2801 East Camelback Road, Suite 200
Phoenix, AZ 85016
602 330 7482
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