Low Industrial Vacancy Spurs Spec Development in Phoenix

The low industrial rate, trend of positive absorption and rising rents in Phoenix is spurring speculative development in the market. Trammell Crow Co. has broken ground on the SM202 Commerce Park, a 700,000-square-foot speculative industrial facility in Metro Phoenix in the Gila River Indian Community.

“Metropolitan Phoenix industrial vacancy rates are at historical lows of 6.1% as of the first quarter 2019 and annual net absorption at historical highs for 3-plus consecutive years running, at an average of 9 million-plus annually,” Joe Ihrke, SVP at TCC, tells GlobeSt.com. “TCC has developed nearly 3 million square feet of new industrial developments over the past five years and has witnessed firsthand the growing size requirements of occupiers. This has driven our thought process for larger buildings at South Mountain 202 Commerce Center.”

The project is in a growing industrial submarket in Phoenix that is becoming a hub for logistics users. “We believe the South Mountain Loop 202 Freeway will be a game changer for travel logistics through Metropolitan Phoenix,” says Ihrke. “This strategic new corridor provides direct connection between the two largest industrial sub-markets in Metropolitan Phoenix and our project location at the first full diamond interchange west of Interstate 10 is very well positioned at the doorstep to the Southeast Valley communities.”