Like all things Phoenix these days, the industrial market is on fire. Ecommerce is driving leasing activity and helping to drive vacancy rates to record lows of 7.2% and rental rates to record highs of $0.59, according to the latest report from Kidder Mathews. Last year was a particularly strong year for industrial activity in Phoenix with 7.5 million square feet in net absorption, and while reports forecast strong activity in 2019, it might not match 2018 volumes.

“While we think it will be a strong year, we don’t know if it will be as active as 2018,” Eric Bell, SVP and industrial specialist at Kidder Mathews, tells “Many companies and developers were planning for a slowdown in the economy within the next 18 to 24 months and are making decisions accordingly.”

Like other markets, ecommerce, third-party logistics users and distribution centers have been a major driver of activity in Phoenix, especially as the population grows. “E-commerce continues to drive activity in the Phoenix area while the strong housing market is propelling the service providers in the construction industry,” adds Bell. “The rental rates are a function of high demand and also increases in construction costs.”

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Kelsi Maree Borland

Kelsi Maree Borland is a freelance journalist and magazine writer based in Los Angeles, California. For more than 5 years, she has extensively reported on the commercial real estate industry, covering major deals across all commercial asset classes, investment strategy and capital markets trends, market commentary, economic trends and new technologies disrupting and revolutionizing the industry. Her work appears daily on and regularly in Real Estate Forum Magazine. As a magazine writer, she covers lifestyle and travel trends. Her work has appeared in Angeleno, Los Angeles Magazine, Travel and Leisure and more.

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