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Absorption activity was down sharply, posting a negative
1.25 million square feet (msf). The year-to-date absorption figures settled
at a negative 2.6 msf. This is a stark turnaround from the over the positive
4.7 msf posted at the end of 2007. Overall deliveries were also down sharply
from last quarter to only 770,469 sf. Under construction activity is down
sharply from all previous quarters this year at 1.7 msf. Each quarter,
under construction figures have declined steadily due to oversupply in
the market. Overall vacancy rates are up as expected posting at 16.4%,
over 6 percentage points higher than at year-end 2007.
With the current economic fallout still rumbling through the mortgage and
securities markets, market volatility will remain at the forefront of every
decision. If the federal bailout succeeds as presented, banks may well
begin to loosen their grips on capital thus allowing transactions and opportunities
to move forward. Hopefully, levelheaded practices and a return to basics
can bring stability back to this troubled market
Contact Matt DePinto at 602.222.5029 for more information.
  Phoenix Industrial Market Report 4Q08.pdf
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