As the promise of 2022 looms on the horizon, most people are anxious to close the books on what is likely the most unsettling year — from the pandemic to politics to supply chain shortages — we will ever experience. Strong leadership has never been more essential than it is today. To share their best leadership practices, Az Business magazine sat down with Arizona business leaders to watch in 2022, including Jeff Foster, vice president and market officer for Prologis.
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Highlights of Jeff Foster interview
IMPACT OF PANDEMIC: “The pandemic has really highlighted industrial, and at Prologis, that’s what we do. We’re strictly an industrial real estate company, and there have been a lot of benefits from the pandemic. The biggest one has been the higher adoption rate of utilizing e-commerce, which obviously is coming out of industrial facilities. As people were locked down at home and couldn’t get out to buy things, more and more people who hadn’t been using e-commerce took to using it more.”
PHOENIX INDUSTRIAL MARKET: “I’ve been here 13 years, and I’ve never seen anything like this. It was already trending in this direction because of Southern California and what’s going on out there, but as that market has gotten even tighter and the rents have doubled year over year, that really catapulted the activity level here in Phoenix. There are 5 million people here. It’s the fifth-largest city in America. Now there’s a robust, diverse workforce here and there’s still access back to 25 million to 30 million people in Southern California. Phoenix has a lot going for it, especially the labor pool. That’s really a big selling point. So I think Phoenix stands in a really good spot to benefit over the next few years from this.”
OUTLOOK FOR 2022: “I think it’s going to keep doing what it’s doing. We’re already at a record level here at the end of Q3. We’ve got 16 million square feet of positive net absorption, which broke the record of last year, which was 13 million square feet total. So we’re on track to do maybe 20 million square feet this year. I think it’s going to continue to go that way. Our company is predicting that in the next two or three years, we’re going to see 400 million square feet of industrial space be needed around the country. And I can see 40 million or 50 million of that being needed right here in Arizona. It really feels like Metro Phoenix is moving from a secondary tertiary market to almost a primary market. We’re not New York, New Jersey, Chicago or Dallas, but we’re getting pretty darn close and keeping pace if not outpacing some of those markets for construction. So I think Phoenix is going to continue to boom.”
