Northwest Phoenix & East Valley Office Inventory—3Q 2026

Phoenix office inventory declined 3.79% across all eight submarket clusters from 2Q to 3Q 2026, with Northwest Phoenix posting the largest percentage decline and East Valley the largest decrease in square footage.

Key Takeaways

• Phoenix office inventory declined 3.79% across all eight submarket clusters from 2Q to 3Q 2026.
• Northwest Phoenix recorded the largest percentage decline in inventory among the eight submarket clusters, with its inventory decreasing by 6.77% of its 2Q total, or 676,320 SF. East Valley recorded the largest total inventory decrease in square footage across the eight clusters, declining by 992,520 SF, equivalent to 3.90% of its 2Q inventory. Tempe accounted for the largest square footage share of the East Valley decline.
• Class B inventory experienced the largest percentage decline among building classes, decreasing by approximately 2.63 million SF, or 6.87% of its 2Q 2026 inventory. Class B buildings also account for more than half of the demolished office properties identified in CoStar.
• Smaller buildings account for most demolitions. Of the Phoenix metro office properties recorded as demolished, 82.2% are under 50,000 SF. However, properties over 100,000 SF account for nearly half of all demolished office space. This data reflects demolitions recorded over time, rather than only those occurring since 2Q 2026.
• From the same set of properties, office demolitions over time were concentrated in three submarket clusters. Northwest Phoenix, East Valley and East Phoenix account for 54.5% of demolished square footage, totaling more than 4 million SF. This skew suggests that the impact of office inventory removal has varied considerably across the Phoenix market.
• Unlike other markets where former office properties are often redeveloped for multifamily use, most Phoenix sites are being repurposed for industrial development amid growth in Arizona’s semiconductor industry. The removal of excess office inventory helps rebalance the office market, reducing oversupply and shifting the remaining inventory toward well-located, desirable office space.

Phoenix Office Inventory Change — 3Q 2026

Frequently Asked Questions

How much did Phoenix office inventory decline in 3Q 2026?

Phoenix office inventory declined 3.79% across all eight submarket clusters from 2Q to 3Q 2026.

Which Phoenix submarket had the largest office inventory decline in 3Q 2026?

Northwest Phoenix recorded the largest percentage decline, with its inventory decreasing by 6.77%, or 676,320 SF. East Valley had the largest decrease in square footage, declining by 992,520 SF.

Which Phoenix office building class lost the most inventory?

Class B inventory had the largest percentage decline among building classes, decreasing by approximately 2.63 million SF, or 6.87% of its 2Q 2026 inventory.

What size are most demolished office buildings in Phoenix?

Of the Phoenix metro office properties recorded as demolished, 82.2% are under 50,000 SF. However, properties over 100,000 SF account for nearly half of all demolished office space.

What is happening to former office sites in Phoenix?

Unlike other markets where former office properties are often redeveloped for multifamily use, most Phoenix sites are being repurposed for industrial development amid growth in Arizona’s semiconductor industry.