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Market Report

Phoenix Industrial Market Report

4Q 2021

Major Commitments Highlight Growing Interest in Phoenix Industrial Market by Tenants and Investors

Quantity of large spaces, swelling labor pool boost demand. During the first half of 2021, net absorption surpassed 11.2 million square feet. That six-month total is larger than the annual recording in every period over the past decade, except 2020. Stronger demand can be linked to several factors. Accelerated population growth is broadening the pool of available workers, luring companies that require sizable staff counts. Alongside this, larger-scale facilities are easier to build here with fewer land and development constraints than in most markets along the West Coast. Additionally, average rents in Phoenix are $2 per square foot lower than the Inland Empire and trail most coastal metros in Southern California by $5-plus per square foot. This prompts firms to transport goods farther inland from the ports.
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