ASU survey: Phoenix commercial real estate slow to recover, but long-term outlook optimistic

By

Lisa Robbins

A recent survey of commercial real estate brokers by Arizona State University’s W. P. Carey School of Business shows a slow and steady recovery continuing for at least another six months. Experts say the Phoenix-area commercial real estate market is on solid ground and they feel optimistic about the future, but near-term activity will likely be slow.

The Fall Brokers Forum Report, a forecast of market conditions for October 2016–March 2017, shows that uncertainty remains and appears to be heightened, as evidenced by responses to the question, “In what direction is the metro Phoenix market moving?” For two years, 100 percent of respondents said the market was moving up. The current survey shows only 88 percent believe the market is moving in an upward direction. Couple that with the question, “Where are we in the cycle?” — where only 52 percent of respondents believed the market was in an expansion mode — and it is clear that uncertainty and cautious attitudes remain.

The W. P. Carey School gathered the group in early October to discuss their insights and thoughts about what will happen between October 2016 and March 2017. The event included a survey of 116 commercial real estate agents and brokers active in the multi-family, retail, industrial, land/housing, investment, and office segments of the Phoenix market. Participants came from a variety of sectors, specializations and brokerage houses across the Valley. The event was moderated and co-organized by Pete Bolton, executive vice president and managing director of Newmark Grubb Knight Frank’s Phoenix office. 

“It is clear from the results of the survey that Forum members are uncertain about where we are today, but they remain confident the metro area will continue to expand in the long term,” explained Mark Stapp, executive director of the W. P. Carey Master of Real Estate Development program. "Uncertainty about the next six months remains in the back of our Forum member’s minds. We are known for being a ‘boom and bust’ market. I think Phoenix may be ‘growing up,’ and this is a more sustainable pattern seen in more mature commercial markets.”

To view the full report, visit the Center for Real Estate Theory and Practice web page at http://research.wpcarey.asu.edu/real-estate/commercial-reports.