Industrial Market Fundamentals Portend Similar Second Half Growth

McKendry says demand from high tech and manufacturing will to spur industrial growth.

PHOENIX—Continued local market business expansion, specialized job growth and an ongoing economic recovery were key factors in the industrial real estate market during the second quarter. These positive indicators helped to lower the Phoenix industrial vacancy to 10.4% while average asking rents increased 4.2% year over year, according to Daum Commercial Real Estate Services’ 2016 second quarter market report.

During the quarter, gross absorption registered 4.55 million square feet of activity while net absorption posted a gain of 1.35 million square feet of occupied space. Nine buildings totaling more than one million square feet were completed in the Phoenix market area while new construction activity increased with 2.9 million square feet currently underway. Among the new space under construction, 47% has been preleased or is committed.