Phoenix leads the nation in industrial construction with nearly 40 million square feet underway by the end of June, driven by large projects like Lucid Group’s EV factory expansion and Ross Stores’ distribution center. Manufacturing projects and previously delayed developments are key contributors to this high supply. Phoenix has five of the top 20 largest industrial projects expected to deliver in the second half of 2024, expanding its industrial space by nearly 10%. However, industrial construction in Phoenix has slowed by 8% since the beginning of the year, with a broader slowdown expected into 2025. Despite this, build-to-suit developments are anticipated to sustain growth as speculative space slows down.
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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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