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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

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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



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The Grimaldo Group
Juan Grimaldo
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Goodyear, AZ 85395
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