Phoenix Industrial Market Report

Backloaded speculative slate will sustain vacancy pressure. The metro’s volume of available stock more than doubled over the past year, reaching 27.2 million square feet in the second quarter of 2024. That tally is on track to rise by an additional 2.7 million square feet during the second half as speculative deliveries become more prominent. While the volume of new supply from July through December will dip relative to the first half, the share of space without a tenant commitment as of midyear climbed from 60 percent to 70 percent. Northwest Phoenix is responsible for more than 5 million square feet of available space set to open. Vacancy here was already up by 860 basis points year-over-year in June and additional near-term pressure is expected. The supply wave is nevertheless supported by major growth, headlined by Taiwan Semiconductor Manufacturing Company’s (TSMC) three chip factories underway here.