In Q2 2024, Phoenix’s industrial vacancy rate rose to 10.6%, driven by a surge in new developments, with over 43.8 million square feet delivered in the past year. Demand from logistics, construction, and manufacturing sectors remains strong but hasn’t kept pace with supply, leading to high vacancy rates, especially in properties over 100,000 square feet.
Despite the rising vacancy, Phoenix remains attractive due to affordable rents averaging $13.62/SF. Rent growth slowed to 7.1% as competition from new supply increased. Smaller properties under 50,000 square feet perform better, with vacancies around 4%. The market is bolstered by significant investments from companies like TSMC and Intel, transforming Phoenix into a hub for advanced manufacturing and logistics.
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