Phoenix Industrial Activity Continues “Frontrunner Status”

There are now almost 49 million square feet of new industrial construction underway in metro Phoenix, created in part by 31 speculative groundbreakings that during the second quarter added an additional 6.6 million square feet of planned space to the Phoenix pipeline, that’s according to the Q2 2023 JLL Phoenix Industrial Insight report.

During the second quarter, 17% of under-construction industrial space and 56% of completed industrial space were pre-committed. Pre-leases represented almost 43% of the more than 4.7 million square feet of new leasing activity completed during the second quarter. JLL’s Pat Harlan adds, “Phoenix remains an industrial frontrunner. There is such a backlog of demand for new space that buildings are being leased long before they complete, by a population of tenants that is becoming increasingly diverse.”

Overall, the local industrial vacancy rate sits at just 3.1 percent.

The Phoenix industrial rental rate as of the end of Q2 2023 is $0.79 per-square-foot, representing a 20% year-over-year increase.