IRR-Phoenix Mid-Year Viewpoint 2015 Local Market Report - Industrial
The overall Industrial market in Phoenix ended the first quarter of 2015 with a vacancy rate of 11.6% and net absorption in that quarter of 1,644,484 square feet. Vacant sublease space in the market also decreased in the first quarter by 1,512,551 square feet. Rental rates have remained relatively steady since the end of 2013 with a quoted rate of $6.57 per square foot.
The southeast submarket, which includes Chandler and Mesa, has seen some growth over the past 12 months as the Price Road Corridor continues to remain desirable. However, the largest and most active submarket in the metropolitan Phoenix area remains the southwest submarket.
First quarter deliveries in that area were 1,410,328 square feet compared to 340,000 square feet for the rest of the metropolitan area. Approximately 572,000 square feet was absorbed leaving the submarket with a 14.2% vacancy rate as of the end of the first quarter of 2015; the highest vacancy rate of any submarket. This majority of the vacant space in the submarket is in six or eight, 400,000 square foot plus warehouse/distribution buildings which missed the rapid growth the submarket had in 2012 and 2013. Most large tenants opted for build to suit opportunities leaving these large speculative warehouses vacant.
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IRR Mid-Year Viewpoint 2015 comprises a National Overview report and 300+ two-page Local Market Reports for all key property types as well as additional resources, including metrics methodology, graphs, and tables; these free reports may be downloaded from IRR’s site here.