Vintage Phoenix Midrise Office Building Slated for Hotel Rooms
Why this matters
Office continues to trade in two distinct markets: trophy assets in walkable submarkets that are leasing at or near record rents, and commodity Class B and C buildings where the basis is still resetting. Underwriting on the latter has moved toward replacement-cost-minus, with credit underwriting now leaning on tenant covenant and remaining lease term rather than mark-to-market expectations. Phoenix is at the front of the Sun Belt multifamily rent-growth recovery and continues to absorb large-format industrial along the I-10 corridor. For LP-positioned capital, the read-through is that the bifurcation is now a structural feature of the sector, not a cycle to wait out.
Editorial analysis · Real Estate Trail Editorial
On the RET wire
- The 28th Phoenix story tracked on the wire in August 2026. All Phoenix coverage →
- Disclosed office deal value tracked in August 2026: $17.1B across 72 reported transactions. All Office coverage →
Computed from Real Estate Trail’s own tracked coverage
The building is nearly a 100 years old, but that isn’t stopping Phoenix developers CivicGroup and Sunflower Development from converting the onetime office tower into hotel rooms. Built in 1928, the Security Building w…
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