Phoenix Commercial Real Estate Transactions Fall, Seeing a 75% Decrease from 2021 Average

The Phoenix commercial real estate market experienced a sharp slowdown in the first quarter of this year, with transactions totaling just $1.8 billion, marking a significant 75% decrease from the $7.1 billion average of 2021. Rising interest rates and a weakening property performance have contributed to this decline, causing a pricing disconnect between buyers and sellers. Multifamily sales took a hit due to a surge in construction activity, resulting in negative rent growth and high vacancies. In contrast, industrial properties’ performance stayed steady, with growing interest from a diverse set of investors. Also, office buildings have struggled due to lower tenant demand and limited financing availability, recording a substantial decline in trades compared to 2021.



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