Updated April 3, 2018

Based on Data Available First Quarter, 2018

Single Family Outlook Remains Very Positive
Commercial Outlook Remains Good

By Elliott Pollack
Greater Phoenix Blue Chip
First Quarter, 2018

    The outlook for single family permits remains very positive. After a gain of 7.2% last year, the panel expects single family permits to increase by another 26% this year and 12% next year. This implies two very good years. Unlike the past few years, the range of the forecasts is relatively narrow. For example, for this year, the range is 22,500 permits to 27,500 permits.

    As for apartments, permits are expected to moderate modestly over the forecast period. But, vacancy rates are expected to stay low by historic standards. Over the past several years, most of what was permitted was upper-end apartments located in a few “A” locations. What the market seems to need now is worker housing (as opposed to subsidized housing). Given the current imbalance in the supply/demand situation for labor and the increasing level of construction costs, delivering moderately priced apartments seems to be a challenge.

    The outlook for office also remains good. Spec construction is expected to be stable over the next two years. Absorption is expected to exceed new supply. The result is a modest decline in vacancy rates over the next two years. This is a positive.

    The industrial outlook remains positive as well. Spec construction is expected to remain strong as is the level of absorption. Given the current strong economic outlook, this seems likely. The forecast does indicate, though, that the level of absorption is expected to be more modest in 2018 and 2019 than it was in 2016 and 2017. Even so, the overall level of industrial vacancies is projected to remain low by historic standards.

    There was little change in the outlook for retail. Spec construction is expected to remain modest by historic standards, while absorption is flat. And vacancy rates are projected to stay about where they have been over the past few years. Not surprisingly, the retail category is the least positive of the commercial pictures painted by the panel.


Residential Forecast
Organization Single-family permits Multi-family permits Apartment Vacancy (Q4 %) Apartment Absorption (Units)
Arizona Public Service2250075006.86,000.0
Belfiore Real Estate Consulting23500
CBRE2500095006.24,774.0
Colliers International2500075006.36,400.0
CRA LLC2550070005.07,000.0
Cromford Report230009500
Cushman & Wakefield2750050006.07,600.0
Elliott D. Pollack & Co.2350065005.87,000.0
Griffin Consulting2450067756.25,750.0
Southwest Growth Partners2525068006.56,000.0
U of A, Eller College225079623
CONSENSUS2434275706.16,316.0
Residential Forecast
Organization Single-family permits Multi-family permits Apartment Vacancy (Q4 %) Apartment Absorption (Units)
Arizona Public Service2740077006.76,300.0
Belfiore Real Estate Consulting25400
CBRE28000105006.44,747.0
Colliers International3200075006.76,500.0
CRA LLC2800085005.08,000.0
Cromford Report265008800
Cushman & Wakefield3250040007.06,900.0
Elliott D. Pollack & Co.2500085006.07,000.0
Griffin Consulting2600068506.15,550.0
Southwest Growth Partners2650062006.75,750.0
U of A, Eller College242189062
CONSENSUS2741177616.36,343.0
Residential Forecast
Organization Single-family permits Multi-family permits Apartment Vacancy (Q4 %) Apartment Absorption (Units)
No data available for the selected filter
Residential Forecast
2018 2019 2020
Organization Single-family permits Multi-family permits Apartment Vacancy (Q4 %) Apartment Absorption (Units) Single-family permits Multi-family permits Apartment Vacancy (Q4 %) Apartment Absorption (Units) Single-family permits Multi-family permits Apartment Vacancy (Q4 %) Apartment Absorption (Units)
Arizona Public Service2250075006.86,000.02740077006.76,300.0
Belfiore Real Estate Consulting2350025400
CBRE2500095006.24,774.028000105006.44,747.0
Colliers International2500075006.36,400.03200075006.76,500.0
CRA LLC2550070005.07,000.02800085005.08,000.0
Cromford Report230009500265008800
Cushman & Wakefield2750050006.07,600.03250040007.06,900.0
Elliott D. Pollack & Co.2350065005.87,000.02500085006.07,000.0
Griffin Consulting2450067756.25,750.02600068506.15,550.0
Southwest Growth Partners2525068006.56,000.02650062006.75,750.0
U of A, Eller College225079623242189062
CONSENSUS2434275706.16,316.02741177616.36,343.0
Actuals From Phoenix Housing Market Letter and CBRE
Organization Single-family permits Multi-family permits Apartment Vacancy (Q4 %) Apartment Absorption (Units)
2017 Actuals1930687255.67,317.0
2016 Actuals1801580225.25,731.0



Office Forecast (Millions of Sq. Ft.)
Organization Construction Vacancy (Year End %) Absorption
Arizona Public Service*2.0014.002.80
CBRE0.8016.301.64
Colliers International*2.2015.502.40
Cushman & Wakefield*1.8019.002.45
Elliott D. Pollack & Co.1.6018.502.20
Lee & Associates*1.5018.502.20
CONSENSUS1.6516.602.28
Office Forecast (Millions of Sq. Ft.)
Organization Construction Vacancy (Year End %) Absorption
Arizona Public Service*3.0013.103.00
CBRE0.6016.300.75
Colliers International*2.5015.302.40
Cushman & Wakefield*1.3017.702.14
Elliott D. Pollack & Co.1.8015.902.50
Lee & Associates*1.5018.002.50
CONSENSUS1.7816.102.21
Office Forecast
Organization Construction Vacancy (Year End %) Absorption (Millions Of Sq.Ft.)
No data available for the selected filter
Office Forecast (Millions of Sq. Ft.)
2018 2019 2020
Organization Construction Vacancy (Year End %) Absorption Construction Vacancy (Year End %) Absorption Construction Vacancy (Year End %) Absorption
Arizona Public Service*2.0014.002.803.0013.103.00
CBRE0.8016.301.640.6016.300.75
Colliers International*2.2015.502.402.5015.302.40
Cushman & Wakefield*1.8019.002.451.3017.702.14
Elliott D. Pollack & Co.1.6018.502.201.8015.902.50
Lee & Associates*1.5018.502.201.5018.002.50
CONSENSUS1.6516.602.281.7816.102.21
Actuals From CBRE (Millions of Sq. Ft.)
Organization Construction Vacancy (Year End %) Absorption

* All space over 10,000 sq. ft.

** All space over 20,000 sq. ft.

2017 Actuals0.5616.402.84
2016 Actuals0.6817.403.22


Retail Forecast (Millions of Sq. Ft.)
Organization Construction Vacancy (Year End %) Absorption (Units)
Arizona Public Service1.208.302.80
CBRE0.158.001.50
Colliers International1.207.802.00
Cushman & Wakefield0.7911.200.98
CONSENSUS0.848.801.82
Retail Forecast (Millions of Sq. Ft.)
Organization Construction Vacancy (Year End %) Absorption (Units)
Arizona Public Service1.308.102.60
CBRE0.187.800.95
Colliers International1.607.302.40
Cushman & Wakefield1.1411.601.10
CONSENSUS1.058.701.76
Retail Forecast
Organization Construction Vacancy (Year End %) Absorption (Units)
No data available for the selected filter
Retail Forecast (Millions of Sq. Ft.)
2018 2019 2020
Organization Construction Vacancy (Year End %) Absorption Construction Vacancy (Year End %) Absorption Construction Vacancy (Year End %) Absorption
Arizona Public Service1.208.302.801.308.102.60
CBRE0.158.001.500.187.800.95
Colliers International1.207.802.001.607.302.40
Cushman & Wakefield0.7911.200.981.1411.601.10
CONSENSUS0.848.801.821.058.701.76
Actuals From CBRE (Millions of Sq. Ft.)
Organization Construction Vacancy (Year End %) Absorption (Units)
2017 Actuals0.158.101.60
2016 Actuals0.008.901.32


Industrial Forecast (Millions of Sq. Ft.)
Organization Construction Vacancy (Year End %) Absorption
Arizona Public Service**5.007.906.90
CBRE*8.407.609.40
Colliers International**7.308.206.00
Cushman & Wakefield**3.398.004.17
Lee & Associates*8.907.008.00
CONSENSUS-TOTAL SPACE6.607.706.89
Industrial Forecast (Millions of Sq. Ft.)
Organization Construction Vacancy (Year End %) Absorption
Arizona Public Service**5.107.606.50
CBRE*5.808.406.00
Colliers International**7.508.006.40
Cushman & Wakefield**2.467.804.00
Lee & Associates*6.507.207.50
CONSENSUS- TOTAL SPACE5.477.806.08
Industrial Forecast
Organization Construction Vacancy (Year End %) Absorption (Millions Of Sq.Ft.)
No data available for the selected filter
Industrial Forecast (Millions of Sq. Ft.)
2018 2019 2020
Organization Construction Vacancy (Year End %) Absorption Construction Vacancy (Year End %) Absorption Construction Vacancy (Year End %) Absorption
Arizona Public Service**5.007.906.905.107.606.50
CBRE*8.407.609.405.808.406.00
Colliers International**7.308.206.007.508.006.40
Cushman & Wakefield**3.398.004.172.467.804.00
Lee & Associates*8.907.008.006.507.207.50
CONSENSUS-TOTAL SPACE6.607.706.89
Actuals From CBRE (Millions of Sq. Ft.)
Organization Construction Vacancy (Year End %) Absorption

* All space over 5,000 sq. ft.

** All space over 10,000 sq. ft.

2017 Actuals5.506.809.90
2016 Actuals3.328.009.50