Industrial Users Are Migrating to Phoenix

Phoenix is attracting new industrial prospects. According to a new report from JLL, the Phoenix market is number one for attracting new and expanding industrial users. This includes 83 tenants in the market that are looking to lease a total of 30 million square feet. The local and state governments have made a tactical effort to attract industrial users and enhance the industrial labor force, and it has paid off. In particular, the state recently removed 1,200 regulations that is deemed unnecessary and created a licensing reciprocation program to honor licenses in other states.

“We have a very pro-business state government,” Anthony Lydon, managing director at JLL, tells GlobeSt.com. “This has enabled us to get qualified workforce into the labor pool sooner, quicker faster. That is one of the reasons why Phoenix has done so well because of the bandwidth that we have in runway as it relates to qualified workforce. Many of the tier one cities are starting to bump up against the wall in terms of qualified workforce, yet Phoenix continues to deliver there.”

Unsurprisingly, ecommerce is driving the majority of the demand and leasing activity for industrial space in the Phoenix market. “With online sales accounting for 13% of all retail sales, ecommerce is a big driver,” says Lydon. “The reality is that less than 50% of retail users have their omni-channel strategy figured out yet, and so we believe that ecommerce is going to continue to be a robust part of our market, including last-mile fulfillment. With the region’s sustained growth, last-mile fulfillment is a key service line in our market.”