Phoenix Industrial Real Estate Market Report | Avison Young US - Phoenix
Phoenix industrial market report
Three key market themes:
Development activity (Q3)
Phoenix continues to expand its role as a key industrial market in the national supply-chain, as the Valley now ranks in the Top-5 nationally for the following metrics over the past 12-months: sf under construction (#2), sf delivered (#5), sf under construction as a % of inventory (#1), net absorption (#4), and rent growth (#2).
A notable portion of the record-setting development pipeline observed in Q2 (57.7 msf) was delivered during the 3rdquarter, with 62 buildings totaling 13.1 msfof industrial space delivered during the period –22.7% of the overall inventory reported as under-construction during Q2.
Net absorption (Q3)
Demand remains strong despite lingering concerns of overbuilding due to record development levels observed in the past year.
Net absorption has decreased significantly from this time last year, but continues on a pace above historical norms, as evidenced by the 11.1 msf absorbed YTD. Such performance is the 4th highest on record with the 4th quarter still to come. Alone the 3rd quarter saw a notable 22.2% increase quarter-over-quarter –rising from 2.7 msf in Q2 to 3.3 msf.
Direct asking rent ($/sf/mo.)
The annual growth rate of direct asking rents in the Phoenix market impressively outpaces all major markets nationally except Charlotte, NC.
Even with the delivery of 13.1 msf of primarily “class A” quality buildings during the quarter, asking rates increased $0.07 from $0.94/sf/mo. in Q2 to $1.01/sf/mo. in Q3 – a 7.4% increase quarter-over-quarter. This is a remarkable rebound from Q2, which saw the first quarter-over-quarter decrease in rent for the first time in 3 years.
Your source for the latest Phoenix industrial real estate report
Stay on top of current trends affecting the industrial real estate sector in Phoenix. Gain an overall better understanding of Phoenix's industrial real estate market conditions, so you can better formulate strategies to overcome any obstacle and know how to best invest in industrial real estate in Phoenix.
Here, you’ll always find the latest industrial real estate market news so you can stay ahead. Come back often to see expert insights on the current and future of Phoenix's industrial real estate market.
Get the latest Phoenix industrial market report right in your inbox