Figures

Phoenix Industrial Figures Q1 2025

April 9, 2025 5 Minute Read

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KEY TAKEAWAYS

‒Net absorption was 1.8 million sq. ft. in Q1 2025, with distribution properties driving the market with around 2.1 million sq. ft. of net absorption.

‒Twenty-seven buildings were delivered for a total of 7.4 million sq. ft. in Q1 2025, down 37.1% in sq. ft. from Q1 2024.

‒Construction volume continued to cool in Q1 2025 with 11.1 million sq. ft. under construction, the lowest number we have seen since Q1 2021.

‒Quarter-over-quarter, the vacancy rate raised 100 bps to 12.2%.

The Phoenix industrial market registered 1.8 million sq. ft. of net absorption in the first quarter. The metro recorded a total of nearly 7.5 million sq. ft. of gross absorption, as 2.4 million sq. ft. in renewals were signed across the Valley and move-ins were dominant in Distribution type assets. Vacancy in the market increased to 12.2% as the 7.4 million sq. ft. of deliveries increased the vacant base in the market.

CBRE tracked an increase of tenant space requirements in the market to start 2025 to 38.8 million sq. ft., a 7.4% increase in demand from Q4 2024.