Smaller warehouse and distribution spaces seem of better value to investors in the Phoenix industrial market

Phoenix industrial data bite February 2024

  • Phoenix dominates industrial construction nationwide, leading to increased vacancies as new deliveries flood the market. This increased vacancy and corresponding market impact over the past 8 years is primarily due to the completion of larger warehouse and distribution centers in West Valley submarkets. In 2023, the market witnessed an addition of 30.2 million sf of new industrial inventory, 90% of which was industrial properties over 100k sf. 


  • Smaller distribution and warehouse spaces sized 20k-60k sq ft have shown consistently low vacancy rates, while properties ranging from 60k-100k sq ft witnessed unprecedented drops in vacancy, ending 2023 at 4.5% and 4.6%, respectively. These small to mid-size properties are seeing strong demand and steady occupancy, offering a lower-risk, high-value investment opportunity.

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