2022 Q3 Phoenix Industrial Report

Businesses are continuing to expand their footprints in Phoenix at an unprecedented pace. Phoenix’s average industrial rent is near the National Index but is roughly 35%-40% below average rents in nearby Los Angeles and Orange County. The market has set new records for absorption over the past two years. Some of the largest space commitments in recent months represent a variety of industries, including logistics/distribution, apparel, e-commerce, electronics, home improvement, and data centers. Leasing activity is strongest in the more affordable Southwest Valley submarkets, including Goodyear, Glendale, and Tolleson. Tenants in these submarkets benefit from proximity to key distribution freeways and can access California markets within a one-day truck haul. The area surrounding the Phoenix-Mesa Gateway Airport is another leasing hotspot. Operators are willing to pay a premium in high-growth areas in the Southeast Valley, where they can draw from a strong talent pool.

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