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The Phoenix industrial sector has been hit by a variety of economic traps. High unemployment and companies unable to grow will keep space in flux for some time. Slight upticks in durable goods orders, renewed by growing consumer confidence, may rally in 2010 as replenishing inventories becomes necessary. Manufacturing employment is up slightly and will probably continue to grow going forward. On the investment front there are savvy investors looking for once in a lifetime bargains.
Vacancy rates for the quarter settled in at 17.5 percent, up 0.5 percentage points from last quarter. Vacancy will remain high as tenants continue to release space faster than it can be filled. Absorption continues to lag in the third quarter with a negative 942,163 square feet (sf) and a negative 4.8 million square feet (msf) year-to-date. Deliveries are still scarce as market realities have slowed existing construction dramatically. Only 68,891 sf were delivered in the Valley this quarter. Under construction activity up at 2.2 msf compared to last quarter’s 1.9 msf.
Contact Matt DePinto at 602.222.5029 for more information.
  Phoenix Industrial Market Report 3Q09.pdf
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