Inside Phoenix’s Office Market. What Tenants and Landlords Need to Know.

Through the first half of 2026, Phoenix’s office market posted six consecutive quarters of positive net absorption, and office sales reached $521 million in the first five months of the year.

That kind of momentum raises an important question: As more businesses compete for the best space, what should tenants and landlords be prioritizing to come out ahead? 

We reached out to ELi Mastracci, CCIM, Vice President & Principal at Phoenix West Commercial, to unpack it. ELi represents both tenants and landlords across the Valley’s corporate office market, and he’s watched this recovery build quarter over quarter. 

ELi’s take: No market moves in a straight line. Even a good market doesn’t fix a bad lease or a poorly maintained building. Finding a good space or a good tenant in any market comes down to planning and having the right team in place before you sign anything.

The Forces Behind Phoenix’s Growth

Phoenix’s office market has been recovering for nearly a year and a half. Although that momentum has started to slow in Q3 of 2026, it’s still outperforming most of the country. 

Office sales through the first five months of 2026 ranked among the strongest in the West, behind only the San Francisco Bay Area and Los Angeles. On the leasing side, Phoenix has also ranked among the top nationally for net absorption, behind only New York City and Dallas-Fort Worth.

What’s driving this growth? ELi points to a few things converging at once.

Strong workforce and education systems

Phoenix ranks 5th in the United States for major metro area growth, and Arizona ranked 3rd nationally for job growth in Q1 2026, adding roughly 15,500 jobs, and wages grew the 3rd-fastest of any state. Additionally, Arizona State University and Maricopa County Community Colleges have stepped in with fast-track training programs developed in collaboration with employers.

Rent Pricing Below the National Average

Phoenix office rents have consistently run below the national average. As of late 2025, asking rents sat around $29 per square foot, compared to a national average near $32.63, with markets like San Francisco commanding more than double that. 

Tech, insurance, and AI infrastructure

Semiconductor investment, data center growth, and expanding insurance and financial services operations have earned the region a nickname: the “Silicon Desert.” Corporate tenants are following that momentum into Class A space, particularly in North Scottsdale and North Tempe, where amenity-rich buildings are in the highest demand.

Bigger capital access for growing businesses

As of July 2026, the SBA doubled its cumulative 7(a) and 504 loan limit from $5 million to $10 million, allowing qualified borrowers to combine up to $5 million through each program. For business owners who’ve outgrown their current space, that helps them acquire or build the kind of office that fits where their company is headed.

Put those pieces together, and it’s easy to see why more businesses are choosing Phoenix.

A Strong Market Doesn’t Mean “Any Space Will Do”

With more businesses competing for space, it’s tempting to move fast: find something open, sign, move in. ELi pushes back on that. For both tenants and landlords, it is crucial to have a plan before you act.

ELi explains, “80% of my job is planning. 20% is execution.”

That ratio may sound surprising, but the companies and property owners who skip the planning step are the ones who often end up with:

• The wrong space/location
• A bad lease agreement
• The wrong tenant

What Tenants Are Looking For

According to ELi, quality, Class A office space is a top priority. Tenants evaluating office space are looking for:

• Intentional design and layout.
• Amenities like boardrooms, fitness centers, or shared collaboration space.
• Proximity to restaurants, retail, and cafes, both for employee convenience and for the visibility that comes with foot traffic.
• A building that reflects well on their brand, especially for law firms, financial services, and other professional offices where image matters to clients.

Tenants are taking the time to find space that checks these boxes.

For Tenants: A Long Commitment Deserves Planning

The average office lease runs 5 to 7 years, ELi notes. That’s a long time to live with a decision made in a hurry, and a long time to fall short of the list above.

Without a clear plan going in, tenants can end up with:

• Wasted square footage they’re paying for but not using
• A location that doesn’t serve their clients or their team
• Landlord/tenant friction that could have been avoided
• A poorly maintained building

ELi’s advice: assemble the right team before you start touring space, not after you’ve found something you like. A good broker, attorney, and lender working together up front is how you catch potential issues before they become problems.

For Landlords: Stay Ahead, Not Behind

Planning matters just as much for landlords, ELi explains. 

For example, a multi-tenant property can offer strong, diversified cash flow, but only if the owner keeps pace with the building and is intentional about who occupies it.

That means staying ahead of:

• Cash flow planning, not just reacting to it
• Capital expenditures, budgeted before they’re urgent
• Fit and finish, upgraded before a tenant leaves
• Tenant selection, choosing the right fit for the building rather than the first lease that comes along

ELi explains that owners who wait until a lease is expiring to reinvest in a building often find themselves with an empty space, a costly renovation, and no rent coming in to cover it. The owners who take the time to find the right tenant and invest ahead of that curve are the ones keeping their buildings full.

Expertise You Can Rely On

Whether you’re a business or a landlord, finding the right space or tenant requires having the right people on your team to help you plan and execute. 

That’s part of the reason why ELi earned his CCIM (Certified Commercial Investment Member) designation early in his career. 

It’s a credential earned through graduate-level coursework, a portfolio of real transaction experience, and a comprehensive exam.

ELi explains, “It’s similar to a CPA designation for an accountant.” 

It’s not legally required, but it signals that someone has the training to break down a complex commercial transaction and see past just the rent price. That could mean structuring a lease that protects a tenant’s interests or helping a landlord think through long-term returns on a building.

For ELi, that training shows up in how he approaches every transaction. He starts by uncovering what a client actually needs, not just for the space they’re touring today, but for where their business is headed and triaging differing wants and priorities.

Plan First. Execute Second.

“There are headwinds showing mid-way through Q3 for Phoenix’s office market,” Eli explains. 

It doesn’t change the fundamentals. If anything, it shows why planning matters, whether the market is heating up or cooling off. 

Whether you’re a tenant signing a 7-year lease or a landlord repositioning a building for its next chapter, the ones who come out ahead are the ones who take the time to plan and assemble the right team to execute.

Thinking through your next corporate office move? Get to know ELi and his work at Phoenix West Commercial.

When your transaction needs a commercial escrow specialist on the team, Arizona Escrow & Financial is here to help, managing the details as a neutral third party for a seamless closing.