By Roland Murphy for AZBEX
CBRE has released its Phoenix Q1 2026 Industrial Figures report.
According to the company’s data, net absorption increased 200% year-over-year and nearly 41% quarter-over-quarter, ending at 4.9MSF. CBRE notes this was one of the strongest quarters in the last three years.
Deliveries fell to their lowest point since Q1 2019, ending the quarter at only 1.4MSF. Vacancy, however, only fell 80 basis points QoQ, marking a notable reversal to the supply spike of 2025.
Asking rents were generally stable, rising to $1.06 NNN, a YoY increase of 6.0%.
Of particular note in the report, CBRE found there are no remaining blocks of 1MSF available following a record three leases of more than 1MSF in a single quarter.
Office Figures
CBRE also released its Phoenix Q1 2026 Office Figures report, which indicates the sector’s recovery in metro Phoenix is a sustained phenomenon.
Vacancy fell to 20.3%, and the sector had a positive net absorption of 135.8KSF, continuing the trend of the last five quarters.
The leading property class is Class B, which saw 314.8KSF absorption in Q1. Both Class A and Class C saw negative absorption.
Sublease space is also being absorbed, as available sublease space was down by approximately 501KSF QoQ. The materials note this as a sign of greater tenant confidence and fewer distressed occupants.
There is still little construction in the pipeline, with just 451KSF currently being built across metro Phoenix. This should, however, contribute to rent growth and reduce the risk of oversupply.
Average asking rents increased 2.5% YoY, with rents at Class A properties increasing a robust 5.0% YoY.
Nearly simultaneously with CBRE’s release, JLL released its own Q1 2026 Phoenix Office Market Report. JLL showed a total year-to-date net absorption of nearly 376KSF and a total vacancy rate of 22.8%.
Asking rents in Class A were up, reaching $42.39/SF, with overall asking rents also up at $31.42/SF.
JLL’s under construction findings closely matched those of CBRE. The firm reported 410KSF under construction across the metro and forecast a continuing decrease in the near term. JLL reports 100% of space under construction is pre-leased.