Phoenix Industrial Market Sees Historic Low 4% Vacancy Rate
April 19, 2022 - Greater Phoenix posted its strongest industrial market conditions during first quarter 2022, according to a report from Colliers. Vacancy fell to a historic low level of 4.0 percent during the first three months, as the market delivered 5.6 million square feet of new projects. Net absorption continues at a robust pace, posting 7.8 million square feet last quarter. Investors also remained active in the market, purchasing nearly $1 Billion in Phoenix industrial space last quarter.
Strong tenant demand drove vacancy down 80 basis points last quarter and 260 basis points year-over-year to a historic low 4.0 percent. The Southwest submarket clusters felt the largest decrease, falling 100 basis points over-the-quarter and 450 basis points year-over-year, ending at 5.1 percent vacancy. This submarket has delivered more than 12.6 million square feet of product since 2020. The lowest industrial vacancy in Greater Phoenix was 1.8 percent, posted in the Northeast submarket, followed by the Airport Area with 2.7 percent vacancy.
Large blocks of space are in high demand and low supply. Only 15 existing buildings in the metro area have space available to accommodate a tenant of 150,000 square feet and just eight options have availability for a tenant over 300,000 square feet.
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