New Phoenix Industrial Builds Show Off the Market’s Maturity

There have been a lot signs that Phoenix’s industrial market is coming into its own. Earlier this year, Phoenix was named a top buy market for investment, and it has seen rapid growth, both in absorption and rent. Now, significant speculative developments are coming to the market. Lincoln Property Co. has just delivered a 40-foot clear height speculative third-party logistics facility in Phoenix, illustrating the quality of the market and user demand.

“We saw a lot of activity in the ecommerce sector, and Phoenix is excelling in that market place because we have a great labor story,” David Krumwiede, EVP at Lincoln Property Co., tells GlobeSt.com. “We are less expensive from a labor perspective on a per hour basis and we have more affordable housing than a lot of our competitors. We most often are competitive with Southern California.”

The industrial market has also shifted in terms of the types of buildings users need, and like Southern California, there was demand for not only quality buildings but functional buildings as well. “One thing that has transitioned in the Phoenix marketplace is that these are no longer old dusty buildings with a forklift,” says Krumwiede. “They are employment centers. We have got a ton of parking because of the labor component that goes a long with an ecommerce logistics company. Phoenix competes very well. We saw an opportunity where we could go out and differentiate ourselves in the marketplace with a larger building that could accommodate a larger tenant or be multi-tenant.”