Phoenix’s Southwest Valley submarket has placed top in the nation for industrial prospects looking for space to relocate or expand their operations, according to the newly released JLL Q2 Phoenix Industrial Insights report. According to JLL, this includes 83 tenants in the market with a maximum requirement of more than 30 million square feet.
“When you consider the region’s robust in-migration, reasonable governmental regulations and sustained growth in global trade and regional consumption, the Phoenix economic machine appears to be hitting on all cylinders,” said JLL Managing Director Anthony Lydon. “Not even the hot summer months have slowed the tide of inquiries, facility tours and letters of intent. As that interest turns to commitments – and then to absorption – I expect we will see even greater expansion of our industry supply chain, which is the backbone of the Phoenix industrial sector.”
According to JLL, nearly a decade of positive net absorption has pushed metro Phoenix industrial vacancy to a 10 year low of 6.7 percent, only decimals away from the Valley’s historic low point of 6.2 percent vacancy achieved during the third quarter of 2006.
As has long been the case, the Phoenix industrial sector continues to benefit from a large flow of manufacturing prospects, e-commerce, logistics and distribution interests – particularly for Southwest Valley space.
“This quarter was a little unique in that Nestle and Ulta both vacated from the Southwest Valley, creating negative absorption in the submarket,” said Lydon. “But in our current environment, we expect that figure will quickly recover with broad demand from industrial big box, mid-bay and data center prospects.”
There is currently more than 6.3 million square feet of new industrial space under construction in metro Phoenix, with absorption continuing to exceed new space deliveries as it has done for five-and-a-half straight years.
To access JLL research for Phoenix and across the U.S., visit the company’s research page at https://www.us.jll.com/en/trends-and-insights#research.