What's Hot

    Eloy P&Z Hears Dual Requests for Major Land Use Overhaul

    August 1, 2025

    State’s Largest Data Center Project Part of Vermaland Pinal Plan

    August 1, 2025

    Pinal Considering 215-Acre Data Center Development

    August 1, 2025
    Facebook Twitter Instagram
    AZBEX
    NEWS TICKER
    • [August 1, 2025] - Eloy P&Z Hears Dual Requests for Major Land Use Overhaul
    • [August 1, 2025] - State’s Largest Data Center Project Part of Vermaland Pinal Plan
    • [August 1, 2025] - Pinal Considering 215-Acre Data Center Development
    • [August 1, 2025] - Hundred-Unit Skyline Towns Townhome Development Moves Forward in Apache Junction
    • [August 1, 2025] - Arizona Projects 08-01-25
    • [July 29, 2025] - Scottsdale Hospitals War May Heat Up with New Banner Request
    • [July 29, 2025] - Dominium Planning 304-Unit BTR in Surprise
    • [July 29, 2025] - Next Steps Coming for Bartlett Dam Expansion
    Facebook Twitter YouTube LinkedIn
    • Home
    • News
      1. View Latest
      2. Planning & Development
      3. Local News
      4. Classifieds
      5. Editorial Analysis
      6. Budgets & Funding
      7. Commercial Real Estate
      8. People on the Move
      9. Arizona Projects
      10. Legislation & Regulations
      11. Trends

      Eloy P&Z Hears Dual Requests for Major Land Use Overhaul

      August 1, 2025

      State’s Largest Data Center Project Part of Vermaland Pinal Plan

      August 1, 2025

      Pinal Considering 215-Acre Data Center Development

      August 1, 2025

      Hundred-Unit Skyline Towns Townhome Development Moves Forward in Apache Junction

      August 1, 2025

      Mohave County May Remove Data Centers as Economic Development Goal

      July 23, 2025

      Ariz. Construction Gained 600 Jobs in June

      July 22, 2025

      Scottsdale Report Shows Multifamily Pipeline Half of Common Estimate

      July 22, 2025

      Alleging Breaches, ZenniHome Closes NGS Operations

      July 21, 2025

      Scottsdale Hospitals War May Heat Up with New Banner Request

      July 29, 2025

      Glendale Voters to Determine VAI Resort’s Fate

      May 16, 2025

      Legislation Would Effectively Strip NIMBYs of Referendum Tool

      February 11, 2025

      2025 Forecast Tries to Clarify an Uncertain Market

      February 7, 2025

      Ariz. LIHTC to Sunset Under New Budget

      July 8, 2025

      State Government Shutdown Averted as Hobbs Signs Budget

      July 1, 2025

      Arterial Life Cycle Program Covers 20 Years of Street Development

      June 27, 2025

      $56M+ MAG Program will Enable $90M in Arterial Street Widening Projects

      June 24, 2025

      Commercial Real Estate 07-29-25

      July 29, 2025

      Commercial Real Estate 07-22-25

      July 22, 2025

      Commercial Real Estate 07-15-25

      July 15, 2025

      Commercial Real Estate 07-08-25

      July 8, 2025

      Industry Professionals 07-29-25

      July 29, 2025

      Industry Professionals 07-22-25

      July 22, 2025

      Industry Professionals 07-15-25

      July 15, 2025

      Industry Professionals 07-08-25

      July 8, 2025

      Arizona Projects 08-01-25

      August 1, 2025

      Arizona Projects 07-25-25

      July 25, 2025

      Arizona Projects 07-18-25

      July 18, 2025

      Arizona Projects 07-11-25

      July 11, 2025

      Mohave County May Remove Data Centers as Economic Development Goal

      July 23, 2025

      Alleging Breaches, ZenniHome Closes NGS Operations

      July 21, 2025

      Ariz. LIHTC to Sunset Under New Budget

      July 8, 2025

      Tax Bill Would Make LIHTC Permanent

      July 2, 2025

      Ariz. Construction Gained 600 Jobs in June

      July 22, 2025

      BEX Updates Construction Sector Projections in Annual Mid-Year Update

      July 18, 2025

      Phoenix Industrial Sees First Vacancy Drop in Years; YoY Completions Drop 75%

      July 18, 2025

      Phoenix Construction Costs See 4.42% Q2 Annual Change

      July 15, 2025

      Eloy P&Z Hears Dual Requests for Major Land Use Overhaul

      August 1, 2025

      State’s Largest Data Center Project Part of Vermaland Pinal Plan

      August 1, 2025

      Pinal Considering 215-Acre Data Center Development

      August 1, 2025

      Hundred-Unit Skyline Towns Townhome Development Moves Forward in Apache Junction

      August 1, 2025
    • AZBEX
      • Subscribe
      • Classifieds
      • Advertising
    • DATABEX
      • Webinars
      • Monthly Snapshot
    • Events
      • 2025 Mid-Year Update
      • 2025 Industrial LMS
    • About Us
      • Meet the Company
      • Meet the Sales Team
      • Meet the Editorial Team
      • Meet the BEXperts
    • CIP Special Report
    AZBEX
    Home » Trends » PHX Industrial Market Surges During Pandemic
    Trends

    PHX Industrial Market Surges During Pandemic

    BEX StaffBy BEX StaffOctober 20, 2020No Comments3 Mins Read
    Source: Bureau of Labor Statistics
    Share
    Facebook Twitter LinkedIn Pinterest Email

    Source: Colliers International 
    The Greater Phoenix industrial market has surged during the COVID-19 pandemic, driven largely by the country’s increased use of e-commerce and elevated grocery shopping while restaurants were closed. Completion of new industrial projects in 2020 has been the strongest year in more than a decade. 
    Arizona’s business-minded approach led to more companies remaining open during the pandemic. The Trade, Transportation and Utility Super industries actually increased jobs year-over-year in the months of June through August. Additionally, demand for warehouse and distribution buildings surged because of online purchasing of goods and groceries.  
    Net absorption of industrial space exceeded 2.5MSF during third quarter. This marked the sixth consecutive quarter of net absorption exceeding 1MSF. Manufacturing and distribution space dominated the quarter, particularly in the Northwest and Southwest submarkets.  
    The vacancy rate during third quarter remained low at 7.9 percent, having increased 10 basis points during the quarter and 80 basis points year-over-year. This marked continuation of sub-10 percent vacancy that began in third quarter 2015. Vacancy remained low despite delivery of 3.2MSF of new space during the quarter. Vacancy is expected to stay low as new tenants are migrating here at an increased rate. Space is being absorbed at a faster pace than previous years. Currently, the top 10 largest buildings under construction have a vacancy rate of just 58 percent. 
    Construction of new properties declined 2.4MSF from the second quarter to a total of 9.2MSF. The Phoenix industrial market delivered more product in the first three quarters of 2020 than it has in more than a decade. West Valley submarket contains more than 85 percent of the current construction activity. However, the Southeast Valley delivered its first sizable big box project this past quarter. The 486KSF speculative building has been leased to Dexcom and has set up that submarket for more big box projects in the future. 
    Infill development resulting from the South Mountain Freeway 202 expansion has captured a lot of attention from the Southeast Valley. This transportation connection to the historically lower-priced Southwest Valley is driving up rents along that freeway expansion. 
    Rental rates increased 6.6 percent year-over-year and 0.15 percent over-the-quarter to an average of $0.61/SF. Distribution buildings posted the largest gain in rental rates, increasing 11.5 percent year-over-year to $0.51/SF. The Airport Area submarket cluster led rental rate increases with year-over-year improvement of 12.3 percent. The Southwest submarket follows with an increase of 8.6 percent year-over-year. Rental rates are expected to continue rising because of strong demand for space and limitations of space availability. A high volume of product under construction will push rates up because of the expense of this new, quality space. 
    The USMCA officially became effective on July 1st, which will benefit manufacturing and distribution in Phoenix. This is especially true at Phoenix-Mesa Airport, which is developing the nation’s first international air cargo hub to house both Mexican and United States customs designed to streamline transportation of goods between countries. 
    Investment sales volume of industrial properties outpaced second quarter by 77 percent. However, 2020 has not been able to keep pace with immense bulk sale transactions experienced in the market during 2019. Third quarter brought $512M in volume, but the price per square foot decreased 3.2 percent over-the-quarter. Price per square foot has increased 6.81 percent year-over-year to $114.  
    The Greater Phoenix industrial market is experiencing tremendous activity and is forecast to continue this trend. Construction will continue moving forward and new speculative development is expected to increase in the fourth quarter. This city has attracted national attention from investors and tenants alike. The enthusiasm for Greater Phoenix will help our economy, and, specifically, the industrial market, thrive moving through 2021. 

    Absorption Commercial Real Estate coronavirus COVID-19 CRE deliveries distribution e-commerce ecommerce fulfillment grocery Industrial logistics new construction pandemic Phoenix-Mesa Airport price per square foot retail USMCA vacancy warehouse
    Share. Facebook Twitter Pinterest LinkedIn WhatsApp Reddit Tumblr Email

    Related Posts

    State’s Largest Data Center Project Part of Vermaland Pinal Plan

    August 1, 2025

    Pinal Considering 215-Acre Data Center Development

    August 1, 2025

    BNSF Looks to Combine Plan Amendment, Rezoning in 1 County Hearing

    July 25, 2025

    Leave A Reply Cancel Reply

    You must be logged in to post a comment.

    Our Picks

    Eloy P&Z Hears Dual Requests for Major Land Use Overhaul

    August 1, 2025

    State’s Largest Data Center Project Part of Vermaland Pinal Plan

    August 1, 2025

    Pinal Considering 215-Acre Data Center Development

    August 1, 2025

    Hundred-Unit Skyline Towns Townhome Development Moves Forward in Apache Junction

    August 1, 2025
    Stay In Touch
    • Facebook
    • Twitter
    • LinkedIn
    • YouTube
    Don't Miss
    Planning & Development

    Eloy P&Z Hears Dual Requests for Major Land Use Overhaul

    August 1, 20250

    By Roland Murphy for AZBEX In its July 16 meeting, the Eloy Planning and Zoning…

    State’s Largest Data Center Project Part of Vermaland Pinal Plan

    August 1, 2025

    Pinal Considering 215-Acre Data Center Development

    August 1, 2025

    Hundred-Unit Skyline Towns Townhome Development Moves Forward in Apache Junction

    August 1, 2025

    BEX serves architecture, engineering and construction firms as well as all the ancillary product and service categories that market to them. These include manufacturing representatives, public agencies and private real estate organizations, specialty subcontractors and services providers related to our industry.

    Our Picks

    Eloy P&Z Hears Dual Requests for Major Land Use Overhaul

    August 1, 2025

    State’s Largest Data Center Project Part of Vermaland Pinal Plan

    August 1, 2025

    Pinal Considering 215-Acre Data Center Development

    August 1, 2025
    Contact Us

    Phone: 480-709-4190
    Address: P.O. Box 12196 Tempe, AZ 85284
    Email: sales@azbex.com

    Type above and press Enter to search. Press Esc to cancel.