As Arizona Escrow & Financial approaches our 50th anniversary in 2026, I find myself in a unique position. From the closing table, we see commercial real estate transactions in their most granular detail — not just the headlines, but how deals actually get done. And right now, how deals get done is changing significantly.
Since founding AEF in 1976, we’ve facilitated thousands of transactions across every commercial sector. The market dynamics of late 2025 are creating ripple effects that extend all the way to escrow, affecting timelines, contract structures, and what it takes to successfully close a deal.
What We’re Seeing from the Escrow Side
The most noticeable change over the past 18 months has been the lengthening of escrow periods. According to Cushman & Wakefield’s Q3 2025 MarketBeat, Phoenix’s office vacancy rate reached 27.2%, while Colliers reports that industrial vacancy climbed to 10.1% after five consecutive quarterly increases. These aren’t just statistics; they translate directly into how transactions unfold.
Lenders are conducting deeper due diligence, requesting additional documentation, and taking considerably longer to underwrite deals. What might have required a 30-day financing contingency three years ago now routinely needs 60 to 90 days.
Appraisal shortfalls are triggering renegotiations more frequently. When appraised values come in below purchase prices, buyers and sellers must return to the negotiating table. As the neutral intermediary, we facilitate these conversations and document amended terms or, when necessary, handle the dissolution of agreements.
For land and development deals, we’re now seeing 12- to 24-month escrow periods. These are timelines that would have been unthinkable just a few years ago. Buyers can’t close until entitlements are secured, and zoning and permit approvals are taking much longer than in previous market cycles.
The multifamily sector illustrates these challenges particularly well. According to Kidder Mathews’ Q3 2025 report, Phoenix’s multifamily vacancy rate increased to 11.6%, with asking rents falling 2% year-over-year. Matthews Real Estate reports that Phoenix absorbed 4,600 units in Q3 2025 alone, demonstrating strong demand, but 6,500 units were delivered in the same period, keeping supply ahead of absorption.
This supply-demand imbalance affects how deals are structured. Contracts now include far more contingencies than during the heated market of 2021-2022: financing contingencies, extended inspection periods, due diligence extensions, zoning approval contingencies, environmental assessment periods. Each contingency represents complexity in managing the escrow process and ensuring all parties fulfill their obligations.
Sector-Specific Observations
Different property types are experiencing distinct challenges at closing:
- Retail has been the most stable sector from an escrow perspective. Retail transactions typically proceed more smoothly than other commercial sectors right now, with fewer financing complications and shorter escrow periods.
- Industrial deals require more patience than in recent years. Buyers are being more selective, focusing on well-located assets in proven logistics corridors.
- Office transactions present the most complexity. Beyond the 27.2% vacancy rate, we’re seeing increased interest in office-to-residential conversions, which create unique escrow challenges given the complexity of entitlement changes and construction financing structures.
- Multifamily deals require sophisticated parties willing to take longer-term views. Despite near-term vacancy pressures, industry forecasts from CBRE suggest that as construction pipelines moderate, the market should see gradual stabilization through 2026.
Practical Guidance for Transactions in 2026
Based on what we’re observing from the escrow side, I offer these recommendations:
- Build longer escrow periods into contracts from the outset. Don’t assume historical timelines will apply. A 45-day escrow that would have been standard three years ago may now require 75 to 90 days or more. Setting realistic expectations prevents frustration and failed deadlines.
- Include comprehensive appraisal and permitting contingencies. Well-drafted contingencies don’t kill deals; they provide the flexibility needed to navigate complications when they arise.
- Prepare for extensive due diligence. Buyers are conducting deeper investigations, and lenders require more documentation and analysis. Sellers should anticipate more information requests and longer evaluation periods.
- Work with experienced commercial escrow professionals. The complexity of today’s transactions demands expertise. Not all escrow companies regularly handle commercial deals, and the learning curve is steep.
What Arizona Escrow & Financial Does
For nearly five decades, we’ve specialized in transactions that require particular expertise and attention. While we handle commercial real estate of all types, our capabilities extend well beyond traditional property transfers.
We facilitate business sales — from small local operations to multimillion-dollar enterprises. We handle vacant land transactions where zoning uncertainties create unique challenges. We manage combination sales involving both personal property and commercial real estate.
Our SBA approval for commercial lending escrows enables us to handle 504 and 7(a) loans, financing tools that help entrepreneurs acquire and grow businesses. We manage holding and disbursement accounts, facilitate liquor license transfers, and handle stock sales and LLC membership interest transactions.
The depth of experience extends throughout our organization. Olivia Limon, escrow administrator with 20 years at AEF, works closely with attorneys, fiduciaries, lenders and investors on specialized services ranging from holding and disbursement accounts to facilitating private purchases of high-value items like classic cars, boats and artwork.
When I reflect on our record-breaking years in 2022, 2023 and 2024, I think about the countless ways our team went above and beyond to close complex transactions under pressure. As our President Annette Anderson noted, the relationship our team shares is incomparable, and their ability to work together to assist clients in achieving their goals is unwavering. Escrow officers like Darci Finsterwalder, Bobby Uhl and Nicole Steele have earned recognition for their professionalism and ability to navigate challenging situations with grace and expertise.
Looking toward Our 50th Anniversary
What strikes me most as we approach this milestone is how the fundamentals of our business remain constant even as market conditions shift. Whether in boom times or challenging markets, parties need a trusted, neutral intermediary to facilitate significant transactions.
The market dynamics of late 2025 and into 2026 are creating a more deliberate, thoughtful transaction environment. Yes, deals take longer and require more expertise to navigate, but they’re also more carefully structured and thoroughly vetted. Arizona’s fundamental strengths remain compelling: steady population growth, diverse economic sectors, and continued business expansion. The parties who approach this market with patience and preparation aren’t just surviving; they’re positioning themselves for success as conditions stabilize.
Phoenix continues to attract businesses and individuals seeking opportunity and quality of life. The transactions we facilitate today are building Arizona’s economic future, whether it’s a business changing hands, a commercial property development anchoring neighborhood revitalization, or an industrial facility strengthening supply chain resilience.
That’s what 50 years really means: five decades of facilitating Arizona’s growth, one transaction at a time. While 2026 may demand more time and expertise to navigate successfully, the ultimate outcome remains the same: helping parties complete transactions that move Arizona forward.
Monica May-Dunn is CEO of Arizona Escrow & Financial Corporation, Arizona’s largest independent escrow company. She has more than three decades of experience in commercial escrow and completed the Fintech Frameworks, Applications, and Strategies course at UC Berkeley. She was named one of AZRE Magazine’s “Most Influential Women in Commercial Real Estate 2024” and received the NAWBO 2025 Phoenix Legacy Builder accolade. Arizona Escrow & Financial is located at 5353 N. 16th St., Suite 110, Phoenix, AZ 85016
