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Market Report

Phoenix Industrial Investment Forecast

2019 Outlook

Transit Network, Relative Affordability Propelling Sector; Speculative Space More Prevalent as Demand Rises


Phoenix emerging as a reputable Southwestern industrial hub. With several major interstates, a recently expanded highway system and a quickly growing populace, demand for Valley industrial space is rising. Considerably lower asking rents than found in Southern California are also fueling demand as some companies bring shipments from Los Angeles area ports to Phoenix for regional distribution to capitalize on affordability. As demand strengthens, market vacancy will dip into the low-7 percent band this year, prompting the development of more spec space. Land along I-10 in the Southwest Valley remains highly targeted by builders due to proximity to major thoroughfares. Vacancy in this part of the metro will continue to rise as supply and demand attempts to rebalance. Additionally, the area surrounding Phoenix-Mesa Gateway Airport is a burgeoning industrial center, headlined by the forthcoming SkyBridge Arizona, the nation’s first international air cargo hub to house both Mexican and United States Customs operations.

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