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Industrial developers can't keep up with robust demand in Phoenix metro, report shows

Tuesday, April 18, 2023   /   by Juan Grimaldo

Industrial developers can't keep up with robust demand in Phoenix metro, report shows


Industrial demand and construction hasn't let up in the Valley as other major U.S. markets see a slowdown in activity.

In the first quarter of this year, tenants in the Phoenix metro absorbed about 4 million square feet of space, or the space occupied minus what was vacated, leading to a low 3.3% vacancy rate, according to CBRE Group Inc. data.

"That speaks to the activity in the marketplace and the tenant velocity that's out there and still remains," said Mike Parker, a senior vice president with CBRE. "We're seeing more manufacturing coming to the marketplace than we've ever before."

State and local agencies marketing Phoenix as a viable place to operate as companies have been moving out of expensive and highly-regulated markets like California has contributed to this growth, Parker added.

Vacancy rates have increased slightly over a year, but without back-office space the rate would be closer to 2.9%, CBRE says. The Northwest Valley submarket had the lowest vacancy at 2.5% in part because of the Taiwan Semiconductor Manufacturing Co.'s presence and more semiconductor suppliers moving to the area.

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By Audrey Jensen - Reporter, Phoenix Business Journal


The Grimaldo Group
Juan Grimaldo
2403 N Pebble Creek Pkwy #101
Goodyear, AZ 85395

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