Industrial developers have increasingly targeted Phoenix’s Loop 303 and Phoenix-Mesa Gateway Airport areas, but oversupply on the outskirts has led some firms to focus on central submarkets with lower vacancy rates. Current projects in the Phoenix metro’s central corridor total 2 million square feet, where vacancies fall below 5%. These include Innovate48, a warehouse replacing a struggling office near Sky Harbor Airport, and a planned conversion of a former Verizon office in Chandler into industrial space. The developments range from speculative buildings to office-to-industrial conversions, leveraging proximity to labor pools and key infrastructure. The Phoenix metro industrial vacancy rate reached 10.1% in Q3 2024, with significant construction and absorption in progress. These projects reflect a shift toward centrally located industrial spaces to meet tenant demand for move-in-ready facilities.
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A full-service lease is a lease that has one, all-inclusive rental rate which includes both the base lease rate and the operating expenses combined into one figure.
A modified gross lease is a lease where the tenant pays base rent at the lease’s inception, but it takes on a proportional share of some of the other costs associated with the property as well, such as property taxes, utilities, insurance, and maintenance.
A triple net lease is a lease agreement on a property whereby the tenant or lessee promises to pay all the expenses of the property, including real estate taxes, building insurance, and maintenance. These expenses are in addition to the cost of rent and utilities.
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