Phoenix leads the nation’s industrial market with nearly 41.6 million square feet of active construction projects, comprising 10.9% of the national total, driven by efficient cost management and increased subcontractor participation. Despite a slowdown in office construction, Phoenix saw a surge in office investment, ranking among top markets. The construction industry in Arizona maintains high demand for workers, with a decrease in the state’s unemployment rate to 4.1% in February 2024. Material pricing is stabilizing in 2024, although challenges persist in specific categories like drywall. Supply chain disruptions are easing, contributing to a potential “soft landing” in inflation and potentially boosting construction activity with the Federal Reserve considering halting rate increases.
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Frequently asked questions
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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