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Southeast Valley taking lion’s share of construction

  • ​The Southeast has recorded a majority of Phoenix’s net absorption since the end of the recession. Users have been attracted to new developments in the area, which boasts a large share of the market’s construction activity.

  • Tempe alone has been home to over 43 percent of the construction activity in the Southeast since 2014. State Farm’s new campus in Tempe encouraged a wave of build-to-suit activity in the submarket, and investors see the value in this too. The recent sale of the campus was the largest office transaction ever recorded in the state.

  • The Northeast saw a boom in construction leading up to the recession, largely tied to expansions for users in the residential home building and mortgage industry. When the market crashed, much of the new space remained vacant for several years, leaving a supply overhang that warranted little new development in the current cycle. ​​

Source: JLL Research

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