The Phoenix industrial market continued to perform in the second quarter of 2018 as healthy tenant demand outpaced new supply.
Overall, vacancy decreased 30 basis points during the quarter to 6.4%—the lowest rate since Q2 2006.
Despite tightening conditions, the market’s average asking lease rate remained at $0.64 NNN per sq. ft (monthly), where its hovered for the past few years.
Demand for industrial space was widespread across the Valley. Manufacturing, third party logistics, e-commerce, and food and beverage users were the most active users in the market.
On the supply side, developers continue to respond to rising demand for industrial space. Builders remained active in the second quarter following a wave of new inventory that came to market last year.
Strong employment and population growth underpins an optimistic near-term outlook for metro Phoenix, which will continue to support industrial fundamentals.