AZRE
The Phoenix industrial market is teeing up for its fourth consecutive year in which absorption gains outpace new construction, according to the Q2 Phoenix Industrial Insight Report released Wednesday by the Phoenix office of JLL.
According to JLL, nearly 60 percent of newly completed industrial properties are pre-leased at delivery, with large users taking advantage of new product in the development pipeline. This has owners offering aggressive concessions in order to compete for the “big fish.”
Rental rates also continue to inch higher, driven by manufacturing properties. In the last year alone, manufacturing rates have surged 18.6 percent, to $0.59 per square foot. Growth in this sector has been particularly exceptional in the Southeast Valley, especially in Tempe and Mesa.
“Manufacturing activity in the Southeast Valley is being driven by a variety of manufacturing types including, but not limited to, probiotics, nutraceuticals, packaging, plastics, low tech, automotive, solar tech and aerospace,” said JLL Executive Vice President Steve Sayre. “About two-thirds of the recent activity we’ve seen is also from companies expanding or those new to town altogether.”
