Phoenix industrial market report

Q1 2022

The industrial market continued to heat up to start 2022 and is showing no signs of a slowdown anytime soon. The current market environment can be characterized as highly competitive for both leasing and investment sales, with record low vacancy rates and escalating pricing. These trends look to continue until new deliveries to the market can close the gap between the supply and demand of industrial space.

245 msf


The total inventory of existing industrial and flex buildings of at least 50,000 sf in size grew to 244.5 msf. This represents an increase of more than 5.7 msf in the quarter. 

6.9 msf

Net absorption 

The Phoenix industrial and flex market recorded 6,928,365 sf in positive net absorption in the quarter. This is the second largest quarterly gain in net absorption since 2018, trailing only the 7.2 msf in net absorption recorded in Q4 2020.


Direct asking rent 

Average rental rates continued to rise at the start of 2022, increasing by 5.3% over the Q4 NNN asking rate of $8.19 psf.

33.9 msf


Total available space increased for the fifth consecutive quarter, reaching 33.9 msf. The amount of total space available to sublease is declining, however, with just 420,128 sf available to sublet.



The total vacancy rate declined to the lowest level on record at just 5.7%. The total amount of vacant space was 14 msf at the end of Q1.


Investment sales 

Investment sales came in at $608M, or $15M below the total volume of sales in Q1 2021. The average sale price of $155 psf was a step back from the $173 psf rate achieved in the prior quarter, but this can be attributed to a high number of premium deals closed in Q4 2021. 

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