Phoenix Industrial Investment Forecast
Expanding Population and Incomes Entice Tenants;
Developers and Investors Ramp up Activity in The Valley
Growing consumer base tenant spillover incite demand boom. The Phoenix metro has seen a surge in industrial leasing entering this year as more than 70 leases of at least 100000 square feet each were signed in 2021 — more than 10 of these being for spaces exceeding 500000 square feet. Major commitments from firms like Best Buy Lowe's and UPS helped net absorption surpass 20 million square feet last year. This lift in demand is supported by the expanding consumer base in Phoenix. The local population is growing nearly three times faster than the national rate and median household incomes are advancing at the fifth quickest pace of major U.S. metros. Phoenix has also benefited from low availability and rising asking rents in Southern California as The Valley provides a cost-efficient alternative and access to a larger stock of available facilities. Developers and tenants have favored the Southwest Valley along Interstate 10 recently as this area offers airport and rail access while also being the closest Phoenix submarket to California.