PHOENIX-The streak continues for the recovery of the industrial market, according to a new survey. The average price paid for industrial buildings in the Valley rose last year for the seventh consecutive time, according to Bob Kammrath, head of Kammrath & Associates, a commercial real estate analysis firm. “While the rebound in values has been universal among all Phoenix real estate, the industrial market, comprised of several segments, has posted more impressive gains in some segments that others,” he says.

In 2000, the market value of industrial space hit a historical high of $50.58 per sf. In 1999, values had been $48.92 per sf. Values have been on a steady climb since 1993, when it was $22.34 per sf.

As with other sectors of the real estate market, the number of sales in industrial are off. There were 239 sales of industrial buildings in 2000, down from 351 the prior year.

During the past year, buyers have paid $69.84 per sf for such space in comparison to just $23.12 per sf in 1993. And, flex building rents have increased accordingly.

While values for warehouse and distribution space have not increased as dramatically as that of flex space, the market has been more stable. The average price paid in 2000 was $37.06 per sf for warehouse and distribution space whereas it had been just $20.11 per sf in 1993.

Flex buildings in industrial park settings have benefited the most in today’s market, where office demand is high. “These structures often serve as a lower cost alternative to traditional office space and, despite increased construction in recent years, values have more than tripled since 1993,” Kammrath tells “Warehouse properties tend to be somewhat insulated from the influences of the usual real estate cycles that affect growth area and they are generally not impacted by events taking place among other property types.”

Kammrath predicts that property values and operating income have experienced the largest percentage increases and that values will remain firm while appreciating at least with the pace of inflation. “The Phoenix industrial market is poised for growth in keeping with the rate of population increase, which is likely to remain strong in the near term,” he says.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?


© 2023 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

Dig Deeper


GlobeSt Net Lease Spring 2024Event

This conference brings together the industry's most influential & knowledgeable real estate executives from the net lease sector.

Get More Information


Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join now!

  • Free unlimited access to's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including and

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2023 ALM Global, LLC. All Rights Reserved.