Phoenix industrial market report

Q2 2022

The Phoenix industrial market continues to show demand strength as rents rose, vacancy rates fell, and net absorption exceeded 5.6 msf in the second quarter. These trends look to continue until new deliveries to the market can close the gap between the supply and demand of industrial space. An influx of new construction starts led to an increase in ongoing construction activity by more than 5.0 msf in Q2, ending the quarter at 39.9 msf.

248 msf


The total inventory of existing industrial and flex buildings of at least 50,000 sf in size grew to 247.6 msf. New deliveries added more than 3.0 msf of industrial space to the rapidly expanding market. 

5.6 msf

Net absorption 

The Phoenix industrial and flex market recorded 5,641,158 sf in positive net absorption in the quarter. In four of the last five quarters, there has been at least 5.0 msf of positive net absorption.


Direct asking rent 

Average rental rates continued to rise in the second quarter, increasing by $0.07 psf on average relative to the prior quarter.

33.3 msf


Total available space declined for the first time in six quarters, declining from 33.9 msf to 33.3 msf in the quarter. 



The total vacancy rate declined to the lowest level on record at just 5.3%. The amount of vacant space was 13.1 msf at the end of Q2.


Investment sales 

Investment sales came in at $817M, nearly double the amount of investment volume in Q2 2021 which totaled $427M. The average sale price of $169 psf is the second highest average sales price in the market’s history, just under the $173 psf average sales price recorded in Q4 2021.

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