In the first quarter of the year, construction activity remained low due to ongoing oversupply, while rents increased in 29 of the 30 major markets we analyzed. The industrial real estate sector remains stable, though upcoming policy changes in global logistics and manufacturing could introduce new challenges. And according to an analysis, Phoenix was the No. 1 industrial market in first quarter of 2025.

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In an effort to capture the current trajectory of this sector, we ranked the country’s top industrial markets in Q1 2025 after analyzing them based on key indicators — vacancy rates, development pipelines, rental trends and loan maturities — using commercial real estate data and research from CommercialEdge and Yardi Matrix, as well as analysis of Google search trends.

Here are some of the key highlights:

Phoenix was the best-scoring industrial market in Q1 2025 with a total of 67.5 points, still being boosted by its solid ongoing construction compared to other markets.

  • More specifically, Phoenix delivered 8.6 million square feet of space in Q1, over double the amount delivered in second-place Dallas-Fort Worth. These deliveries brought along a 2.2% expansion of industrial inventory in Phoenix, in the context of all other markets in the study recording expansions of under 1%.
  • Phoenix has 15,748,674 square feet of industrial space — or 3.9% of inventory —  currently under construction, placing the market 2nd for this metric.
  • The market saw the 5th-highest increase in average sale price per square foot of industrial real estate compared to last year’s first quarter. Here, the price went from $151 to $163, marking a $12 increase.
  • Phoenix also saw online interest in industrial space growing, with the average monthly search volume for industrial real estate keywords at a state level increasing by roughly 7% over 12 months.

You can find more information about this topic in our full report: https://www.commercialcafe.com/blog/national-industrial-report/