Despite a national slowdown in the industrial sector, Phoenix remains a top market for large warehouse space growth, ranking second in the U.S. with a 6% growth rate in 2023. This marks a significant drop from the previous year’s growth rate of 14.3%. Factors such as supply chain issues and weather delays contributed to a record number of industrial buildings being added to the Valley’s inventory. However, leasing activity has rebounded this year, driven by the region’s proximity to California ports and a shortage of big-box inventory elsewhere. Phoenix’s construction of large warehouses has surged, particularly in the West Valley, catering to demand from industries like automotive, construction, and e-commerce. Despite an increase in vacancy rates due to the influx of deliveries, rental rates for large warehouses continue to climb, reflecting sustained demand in the market.
