Greater Phoenix continues to shine as one of the nation’s top-performing industrial markets. Strong tenant activity heading into 2026 indicates the market will remain a leading city for tenants and investors, according to a report released by Colliers. 

Limited new developments and healthy tenant activity drove industrial vacancy in Greater Phoenix down 10 basis points during fourth quarter to 9.7 percent at the end of 2025. 

Fourth quarter net absorption totaled 3.2 million square feet, bringing the annual 2025 total to 18.2 million square feet. This marked the strongest yearly performance in Greater Phoenix since 2022.

New deliveries in fourth quarter continued a downward trend, adding just 2.4 million square feet of new inventory. The slowdown reflects healthier market balance that has allowed the market to absorb 34.8 million new square feet.

Average rental rates for industrial space rose slightly in fourth quarter 2025, ending at $1.14 per square foot.