Rising OPEX Pressure from Landlords, passed down to tenants, manifests in several measurable ways: Higher operating costs per square foot due to inflation in utilities, insurance, property taxes, maintenance, and labor can be passed through to tenants in annual increases. Increased capital expenditure requirements as landlords upgrade HVAC, security, and amenity spaces to attract tenants in a flight-to-quality environment can also be passed through to tenants, depending on lease language. In negotiation, most tenants focus on free upfront rent, the rental rate increases, and parking concessions. But operating expense increases (OPEX) are just as crucial, and must be negotiated in addition to other lease terms. COMPLIMENTARY VACANCY REPORTS: Renee Ervanian: Managing Broker https://www.corecommercialllc.com 602 330 7482 renee@corecommercialllc.com

Is Office Demand or Demolition creating a surge in Office Absorption? VACANCY RATES: 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. TENANT REP BROKERS: A tenant rep broker is essential for identifying where leverage exists and converting this into tenant concessions. TENANT IMPROVEMENT PACKAGES - CLASS B BUILDINGS STILL DELIVER FULL MODERNIZATION: The landlord can fully modernize a Class B vacancy before a tenant takes occupancy. Many landlords will fund a complete tenant improvement package, including updated ceilings and LED lighting, new window coverings, new flooring and paint throughout, and a refreshed, modern break area. In exchange, the landlord's primary requirement is a long-term lease, which allows a landlord to amortize tenant improvement costs. If a tenant commits to the term, and financials are strong, upfront free rent and favorable lease rates remain negotiable. 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 COMPLIMENTARY: BEST OPTIONS REPORT CONTACT: Renee Ervanian Managing Broker CORE COMMERCIAL LLC https://www.corecommercialllc.com Direct: 602 330 7482 Email: renee@corecommercialllc.com

Core Commercial, LLC launches. https://www.corecommercialllc.com. Makes a bold entrance in the Camelback Corridor: A New Boutique Brokerage in Phoenix Led by Renee Ervanian, Blending Agility with Institutional Discipline for High-Stakes Negotiation Success.

ANCHORED IN THE CAMELBACK CORRIDOR: 2801 EAST CAMELBACK ROAD SUITE 200 PHOENIX, AZ 602 330 7482 https://www.corecommercialllc.com | renee@corecommercial.com

RISING 2026 RENTS: THE FASTEST WAY TO OFFSET THEM Rents in the Phoenix office market are expected to rise in 2026. Many office suites still include outdated file rooms, legacy data rooms, and wasted hallway space. Modern layouts use smaller offices, larger glass lines, and zero dead space. Updating your office space may reduce your footprint, create significant cost savings, and upgrade your client image. If you have a 2026 lease expiration, I can show you exactly how much space you can eliminate and what that means for your rent savings.

THE MODERN CORNER OFFICE STILL PREFERS A VIEW. The Phoenix Office Market is currently showing mixed signals, making it more complicated to decide whether to relocate or renew your lease. While there has been positive net absorption with favorable and steady leasing activity, market trends indicate a high demand for smaller, upscale suites, while larger, older suites are facing rising vacancies. This is a result of the hybrid work models remaining strong and in demand, as many employees prefer to work from home. The office floor plan is being redesigned to align with the evolving hybrid work culture - creating a dynamic environment that fosters both in-person collaboration and remote productivity. arizona commercial real estate market - Search 50 commercial real estate projects to know for 2025 - AZ Big Media RELOCATING OR RENEWING YOUR LEASE? CALL FOR A LIST OF PERFECTLY MATCHED VACANCIES.

The photo below is from a recent article in In Business Magazine, which highlights the increasing demand for upgraded commercial spaces. Tenants may assume that relocating to a newer building and enhancing their business brand is financially out of reach. However, that's not always the case. If tenant financials are favorable, landlords may offer significant upfront free rent and concessions as an incentive. Additionally, your current suite may have inefficient use of space, such as an oversized IT room that could be redesigned into a compact cabinet. A well-designed, open floor plan with smaller offices rather than long hallways and oversized offices could create a more efficient layout. High ceilings, larger common areas, and expanded window lines can make a smaller suite feel more spacious and efficient. AZ’s Top 10 Commercial Real Estate Projects in 2025 Bing Videos modern.AZ ’s Top 10 Commercial Real Estate Projects in 2025 What's Driving Arizona’s Commercial Real Estate Market? - Arizona Commercial Real Estate | ICRE

Securing office space, whether renewing a lease or obtaining a new location, is a time-consuming, detailed process that can significantly impact the monthly budget. Working with a tenant rep broker is a game-changing experience. Tenant rep brokers provide market knowledge, negotiation skills, and transaction expertise that match the landlord's capabilities. This ensures the tenant is on equal footing and finalizes the best deal possible. Protecting the tenants interest by structuring the most favorable deal possible is the goal of the tenant rep broker. What's Driving Arizona’s Commercial Real Estate Market? - Arizona Commercial Real Estate | ICRE https://www.orionprop.com/topfive/inside-the-revamped-52m-camelback-office-that-offers-a-celebrity-chef-speakeasy-and-dog-park/ https://inbusinessphx.com/hr-management/the-roi-of-employee-engagement https://inbusinessphx.com/commercial-real-estate/the-ultimate-office

COMMERCIAL REAL ESTATE AND DEVELOPMENT | COVER STORY | MAY 2025 This article discusses how the traditional office is becoming obsolete. The best workplaces, most appealing to employees and clients, flow like neighborhoods. Modern floor plans include spaces that offer deep focus and thought, collaboration in a group setting, and social interaction. The modern office helps the work place feel alive instead of being locked into a dull, and dated, work model. Modern work concepts can easily be accomplished with: Renewal | Rennovation | Relocation. THE TOP 50 CONSTRUCTION PROJECTS IN ARIZONA ARE ITEMIZED IN THIS LINK https://azbigmedia.com/real-estate/50-commercial-real-estate-projects-to-know-for-2025/ What's Driving Arizona’s Commercial Real Estate Market? - Arizona Commercial Real Estate | ICRE

COST SAVING NEGOTIATIONS In the Phoenix, Arizona, commercial real estate market, several key trends are emerging for 2025. The trends include a focus on sustainability, the rise of mixed-use development, and a strong industrial sector driven by e-commerce and logistics. Additionally, the multifamily sector is experiencing growth due to leasing vs. buy because of high mortgage rates and home prices. Most important is the growing trend and emphasis on creating appealing and functional workplaces for employees. Modern floor plans play a vital role in creating an efficient, high-performing office environment IMAGINE YOUR PERFECT OFFICE SUITE: 602 330 7482 COMPLIMENTARY BEST OPTIONS REPORT: 602 330 7482 April 2025 Market Outlook | National Bank of Arizona 2025 Commercial Lease Expiration Wave: Key Risks & Opportunities for Landlords and Lenders — LAREDIAZ