Commercial Real Estate: Who’s Winning, Who’s Resetting
- Alicia Milton
- 34 minutes ago
- 2 min read
In July 2025, Maricopa County told four very different stories:
🏢 Office fell –14% YOY
🏬 Retail dipped –25% YOY
🏭 Industrial rose a steady +13% YOY
🏘 Apartments skyrocketed +350% YOY
What does it mean?
Capital is flowing where demand is resilient, multifamily and industrial. Retail is under selective pressure, while office continues to search for stability.
Big Picture:
Phoenix added 18,000 apartment units last year, keeping it a top-10 U.S. demand market despite a 12% vacancy rate. Retail vacancy holds at just 2.6%, and industrial absorption remains strong even with record construction.
Where do you see the next wave of opportunity in Maricopa County?
This is more than snapshot data. It signals capital and operational shifts:
Multifamily remains a dominant draw, strong absorption, rent resilience, and demand outpacing supply, despite higher vacancies.
While there is still new supply there is still absorbtion. Over the past year, 24,000 new units were completed in Phoenix+ which is triple the annual average from 2015–2019, yet net absorption reached 18,000 units as mentioned above, ranking Phoenix among the top 10 U.S. apartment demand markets.
Vacancy at 12% shows an elevated rate that reflects the rapid new supply. Luxury (Class A) properties are particularly impacted, while Class B/C, often more workforce-focused remain more resilient.
As of June 2025, the multifamily market shows early stabilization, net absorption is up 20% YOY to 531,000 units, vacancy holding at 8.1%, and rent growth around 0.9%.
Industrial, while dealing with oversupply, continues to absorb space steadily which has been a testament to the Phoenix MSA’s distribution economy.
Strong absorption, but rising vacancy in Greater Phoenix witnessed 4.1 million SF of net absorption in Q2 2025, with vacancy at 11.2%. This is a performance often viewed as solid in commercial real estate.
Construction still heavy here. The industrial pipeline remains loaded with about 11.9 million SF of new projects underway. This is powerful especially if you are currently or plan to invest in this type of commercial real estate.
There’s been a 15-year vacancy high in this product type. Buildings larger than 100,000 SF are hitting historic vacancy levels (~16%), driven by the delivery surge outpacing demand. Many owners are holding out to get their price. Is this you? How long will you wait?
Retail, especially neighborhood-focused assets, is quietly outperforming narratives of sector-wide decline.
There’s been unexpected steadiness in this product type. One of my absolute favorite product types in this industry.
Retail vacancy in Phoenix is low at around 2.6%, with rent growth steady at ~1.8%.
Dense, well-located retail and service businesses are doing well. What types are these you ask? Think local eateries like my favorite Point 22 Tavern, salons, convenience stores that continue drawing foot traffic and investor interest.
Office, is still moving product. In KW Commercial, it’s been a top producing property type. It’s been a quiet member of the commercial real estate investment group. Most likely because office is still facing structural changes as a post-pandemic effect.
INVESTORS AREN’T RETREATING, THEY’RE REALLOCATING.
Every property is unique, and so is the strategy behind it. If you’d like tailored insights aligned to your goals, connect with me through the contact section of our site at https://www.realestatewithalicia.com/contactus.