Phoenix Industrial Market Report (4Q 2020)21 Jan 2021
For all the tumult of 2020, one real estate sector did spectacularly well: industrial. Record setting transaction volumes, spiking demand for space, and rising rent growth were driven by rapid changes in industrial space use. New opportunities opened as industrial space users shifted priorities, reconsidered site selection criteria, and examined conversion options in tight markets. Whether changes in consumer shopping habits are permanent remains to be seen, but the real estate impacts are profound and ongoing. Manufacturers and retailers look to add warehouse space to offset supply chain shocks, blurring the line between retail and industrial real estate. A number of brick and mortar stores quickly accommodated on-site order fulfillment that may move offsite or integrate further as a hybrid of retail and distribution. Additionally, the explosive rise in delivery services has developers eyeing obsolete but centrally-located retail space for industrial conversion. By any measure, the industrial real estate sector had an extraordinary year.
Market Inventory: 276,514,526 sf
Vacancy Rate: 8.4%
Net Absorption: 7,868,359 sf
Contruction Pipeline: 7,908,203 sf
Average Asking Rate: $8.31 psf