The Phoenix industrial market’s momentum continued into the new year with 4,020,361 sq. ft. of positive net absorption, its 40th consecutive quarter of gains.
The first quarter net absorption is the highest since Q4 2013 when the market absorbed 6,577.682 sq. ft.
Phoenix industrial vacancy was 5.6% in Q1 2020, a decrease of 70 bps after a moderate increase in Q4 2019.
The overall average asking lease rate of $0.69 per sq. ft. NNN in Q1 2020 was a slight increase from Q4 2019 ($0.68 per sq. ft.) and a more significant year over year improvement, up $0.05 from Q1 2019 ($0.64 per sq. ft.).
Currently, 14,312,056 sq. ft. of industrial space is underway across the Phoenix market. At the end of the quarter 36.7% of the space under construction was committed to by tenants currently located in the market and new entries to Phoenix.
Construction is heavily concentrated in the Southwest Valley due to availability and affordability of land, where 11,931,886 sq. ft. of product is underway. This Southwest Valley total is more than year-end 2019 under construction volume for the entire metro.