The Phoenix industrial market has found its perfect balance. The market has one of the most active new construction pipelines in the nation for industrial product, but the development isn’t in danger of surpassing demand. In fact, Phoenix has seen consistent industrial absorption since 2016, giving developers a good forecast of activity and helping to keep new construction in check.
“The most remarkable factor of the Phoenix Industrial Market has been consistency,” Cooper Fratt, SVP at CBRE, tells GlobeSt.com. “Each year, beginning in 2016, Phoenix has seen between 9.5 and 10 million square feet of annual net absorption and between 17 and 18 million square feet of annual gross absorption. This trend has held true through the first three quarters of 2019 and we expect this activity to continue through 2020.”
New entrants into the market are driving the strong industrial absorption. These companies include Nike, Microsoft, Chewy and Daimler, all of which have moved into the market this year. “Due to the tightening supply of developable Industrial land in many of the market’s traditional industrial submarkets, we are starting to see Glendale, El Mirage and Surprise attract larger manufacturing and warehouse users,” says Fratt.