Phoenix, AZ Market Report

Phoenix medical office vacancy stands at 12.3% overall, but single-story buildings — the format most healthcare practices prefer — are running at just 7.2%. Rent growth has cooled to 0.7%, well below the five-year average of 4.5%, and 558,000 square feet is under construction, creating more options but also more competition. Investors closed approximately $653 million in transactions last quarter, a 4% increase, signaling continued confidence even as the market shifts in favor of tenants who know how to negotiate.