Phoenix Industrial Market Report
Firms Prioritize Cost-Friendly Areas for Larger Facilities;
Barrage of Speculative Projects Incoming
Relative affordability of Southwest Phoenix luring tenants. The metro’s largest submarket, Southwest Phoenix, garnered a handful of sizable lease signings in the past six months, helping to ease vacancy pressure in the area with the highest availability in the metro. Demand is particularly strong in the corridor just south of Interstate 10 and surrounding Loop 202. Gatorade, The RealReal, HelloFresh and Honeywell are each occupying 300,000 square-foot-plus facilities here in 2021. Contributing to firms’ decisions to lease space in Southwest Phoenix is the well-below market average asking rent of $5.88 per square foot. Lower rent can be partially attributed to the locale’s elevated vacancy, which has exceeded 10 percent for most of the past two years. The rate fell 30 basis points in 2020, however, and momentum should be sustained in 2021.