The Phoenix industrial market continues to experience tremendous growth and again outperforms previous quarters. Phoenix’ primary drivers of growth are expansions of local high-tech industries and the creation of high-wage jobs. Strong demand for industrial space compressed vacancy to the lowest level witnessed in the market at 4%. Rent growth in Phoenix has consistently outpaced the U.S. average, yet Phoenix remains relatively affordable, especially for its size.
At the end of the first quarter of 2022, there are 37,567,476 square feet under construction. Deliveries are projected to hit an all-time high in 2022, demonstrating the high confidence of developers and investors that new product will attract tenants. Most of the new inventory is in the Southwest Valley, primarily due to the region’s proximity to California and its relative affordability can be credited for the increase in demand for manufacturing and distribution space.
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