The Phoenix industrial market’s momentum continued into the fourth quarter with 2,594,616 sq. ft. of positive net absorption, its 39th consecutive quarter of gains.
The positive absorption contributes to the year-end total of 10,677,269 sq. ft. of net absorption, the highest annual total since 2005.
Phoenix industrial vacancy was 6.3% in Q4 2019, up 20 bps after a moderate decrease in the third quarter. The modest increase is largely attributed to healthy levels of recently completed speculative buildings.
The overall average asking lease rate of $0.68 per sq. ft. NNN in Q4 2019 was a slight increase from the previous quarter ($0.66 per sq. ft.) and a more significant year over year improvement ($0.63 per sq. ft.).
In Q4 2019, 3,268,937 sq. ft. of industrial product delivered in the Phoenix market, with 60% dedicated to speculative space. The new product contributes to the yearly total of 9,134,088 sq. ft. of industrial completions.
The expansion and improvement of infrastructure, including the recently completed 22-mile extension of Loop 202 in the West Valley, will provide users with increased accessibility around the metro and to other major markets.