Commercial real estate started the year busy across all asset classes, with market participants back and ready to make deals happen. Owner-occupant office and industrial properties, particularly in North Phoenix and beyond, are in high demand. Land and special-use properties are notably active, along with single-tenant net lease properties. This segment has a unique buyer base, including family offices, cash buyers, and others who are interested in income-generating assets.
Office has continued its trend from last year. Large, multi-tenant high-rise office buildings are selling, albeit at extreme discounts, and some are selling with repurposing in mind. These projects include converting suites to condos, opening ownership opportunities for occupants, and several sales of entire buildings to owner occupants.
Medical office building sales remain strong, with numerous transactions taking place since the beginning of December and pricing holding steady. Contributing to this subsector’s resilience — and its vacancy rate of around 11.5% — are tenant retention, long-term leases, steady returns and cash flow, and limited new construction.
Meanwhile, multifamily continues to experience headwinds in occupancy, with a fairly high vacancy rate hovering around 12.9%. That remains a concern, particularly with additional inventory entering the market. Despite these challenges, multifamily properties are still selling, competing against similar inventory that is currently available or soon to be delivered.
On January 16, the Wall Street Journal put the spotlight on Phoenix for having the largest percentage of rent concessions in the country. An estimated 54% of rentals in the Phoenix metro are offering tenants at least one month of free rent.
This strategy allows landlords to maintain higher rent rolls while making properties more attractive to investors. Rather than lowering monthly rents, concessions improve affordability upfront while preserving stronger long-term financials — an especially effective approach given today’s vacancy rates.
Beyond financial incentives, landlords have become increasingly creative in attracting renters. Offers now include new appliances, Amazon gift cards, discounted sports tickets, and even free moving trucks. Even with these incentives, overall rental rates in the Valley declined. By the end of 2025, Phoenix rents were down 4% year-over-year, compared to a national decrease of 1.3%, according to Apartment List.