By InBusiness
An impressive 49.2 million square feet of new industrial space is under construction in Metro Phoenix, according to the mid-year industrial report released by Colliers in Arizona. This marks a 40.2 percent increase in construction compared to the end of June 2022. During that same 12 months, average industrial rental rates increased 24.5 percent, causing “sticker shock” for renewing tenants.
Towards the end of the second quarter, construction began on approximately 6.4 million square feet of new industrial space in Metro Phoenix, increasing the total amount to 49.3 million square feet. Approximately 19.04 percent of that space being built has already been pre-leased. The figure reached such a high level because of the extended construction timelines caused by supply chain and labor issues. During the second quarter, only 3.8 million square feet of new space was completed, making it the lowest period for additional new inventory in six quarters. Approximately 56.8 percent of the quarter’s new space, or 2.2 million square feet, was leased prior to being finished. Second quarter completions brought the total delivered year-to-date to 8.3 million square feet. Approximately 54 percent of that new inventory is located in the Southwest submarket. The Southeast submarket had the largest expansion of current product underway, marking a 105.6 percent increase year-over-year for that area of the metropolis.
