Phoenix Q4 Industrial: Fundamentals Continue Driving Sector Success

Much of the analysis concerning Phoenix’s industrial market in Q4 2019 focused on the economy. Specifically, job creation and its impact on the sector.

Newmark Knight Frank analysts indicated that job growth, along with growing demand for e-commerce, were two of the positive fundamentals, adding that “progress on the China and United States-Mexico-Canada trade agreements has dispelled much of the uncertainty that has been hindering business investment and expansion.” The result, according to Avison Young’a analysts, was that “the Phoenix industrial market finished the year at the head of the property sector pack,” with market rents up, tight vacancy and a “somewhat understocked” inventory. Colliers International indicated that 2019 sale volume hit “another five-year high point,” while CBRE offered the fact that absorption for the year eclipsed 10 million square feet for the first time since 2005.

Moving on to the coming year, CBRE analysis are forecasting that “falling vacancy, disciplined and strong rent growth, and a healthy supply line” are leading to a positive outlook for 2020 and beyond.” And, while Avison Young suggested that while continued trade disputes or an economic speedbump could impact the economy, the sector holds steady, “developers have acted more strategically in this cycle to avoid the tendency to overbuild in a boom.” Colliers researchers, meanwhile, indicated that that rents will continue increasing in the face of “tight demand for space and with newer, more expensive product coming to market.”