Source: Cushman & Wakefield
Cushman & Wakefield published its Marketbeat Industrial Snapshot Q12016 for Metropolitan Phoenix.
Metro Phoenix Economy
The Metro Phoenix job market continued to show signs of economic prosperity, adding 67,000 new or relocated jobs annually through February 2016. During the same course of time, the unemployment rate decreased 80 basis points (bps) to 4.6%. With employment reaching 1,964,800 total non-farm jobs, the Valley has recovered all the jobs lost during the Great Recession.
The total included 12,700 industrial sector jobs within the manufacturing, construction, natural resources & mining, transportation, warehousing & utilities and wholesale trade sectors.
Construction topped the list with 7,200 jobs accounting for 57% of the new industrial positions this year. As a whole, the industrial employment sectors make up 19% of the total employment base within the Metro Phoenix region.
The first quarter of 2016 opened with a positive outlook on the Phoenix Metro industrial market. The vacancy rate held its place at 10.1% over the last three months, and improved 100 basis points (bps) since this time last year (11.1%).
Occupancy gains are keeping up with newly developed product, and leasing activity remains steady. One submarket that draws notable attention is North Glendale, where the vacancy rate dropped 620 bps over the past year, currently settling at 5.6%.
The Gilbert-Gateway submarket also experienced a significant gain in occupancy, with the rate currently sitting at 8.0% after dipping 170 bps over the last three months. Conversely, the Deer Valley submarket experienced a 110 bps gain in vacancy (8.7%) this quarter as the Corridors Industrial Park added over 220KSF of vacant spec inventory to that submarket.
The Southwest Phoenix submarket experienced a steady decline in vacancy (13.1%), as four of the top five occupancies for the quarter transpired within this area. McLane Food Service occupied their newly developed distribution space, contributing nearly 350KSF of absorption to this submarket.
Additionally, Dircks Moving & Logistics and Mattress Firm each occupied over 170KSF in the Southwest Phoenix submarket. Inland Kenworth also contributed over 98KSF to this figure by taking possession of their built-to-suit (bts) truck service facility.
The Grand Avenue submarket closed out Q1 2016 with a substantial loss as Ashley Furniture vacated their 141KSF facility, causing the submarket to end the quarter with 94KSF net loss.