The Greater Phoenix industrial market experienced a rise in sales prices as the market cooled in the third quarter. The median price for an industrial building sold in third quarter reached $106 per square foot, up from $97 in second quarter. One of the most noteworthy sales this past quarter was the $98.3 million purchase of an Amazon fulfillment center.
Absorption remained positive during third quarter, but at a much lower level than during the first half of the year. Net absorption totaled approximately 880,000 square feet in third quarter, which was a stark decline from more than 2.5 million square feet absorbed during second quarter. Year-to-date, net absorption totals nearly 4.7 million square feet.
Vacancy rose for the first time in more than a year with decreased net absorption and new projects coming online. Industrial vacancy rose 20 basis points during third quarter, but the current rate remains lower than 12 months ago. Vacancy sits at 7.4 percent, which is a noteworthy improvement over double-digit rates experienced as recently as 2015.