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PHOENIX-Southwest Phoenix has landed yet another distribution tenant.

Home Depot, the home-improvement retail giant, has leased 108,660 sf in a distribution building at 55th Avenue and Madison Street in the southwest Phoenix area. Home Depot plans to use the space as a distribution point and regional lumber hub.

Southwest Phoenix has increasingly become the location for distribution centers because of its close proximity to Interstate 10, which runs through the Valley and on to California, and because of convenient rail spurs and affordable land.

The demand for distribution space has prompted the construction of millions of sf of new industrial space during the past several years, including some half-million-sf projects. In the Tolleson and southwest Phoenix areas, more than 1.8 million square feet of new industrial space was brought to market through the third quarter, according to a recent survey by CB Richard Ellis. Another two million sf is under construction and should be on the market within months.

The vacancy rate in southwest Phoenix was 7.63% for industrial buildings at the start of the fourth quarter, compared to 7.69% for the overall Valley.

The Phoenix office of Grubb & Ellis negotiated the lease for the building owner, Phoenix Cocopah Partners.

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