Q4 2020 Industrial Market
The Phoenix industrial market ended the year with the highest year-to-date net absorption ever witnessed at 13.9 million square feet, with net absorption exceeding 7 million square feet in the fourth quarter.
- Under construction decreased 2.2 MSF from third quarter to 7 MSF
- Delivered 6.5 MSF of new product in Q4, the most new space delivered in a single quarter in Phoenix market history
- During 2020 the market delivered the most amount of inventory ever witnessed within a single year, adding 16 MSF
- Asking rates continued to increase nearly 6.78% year-over-year and up 1.61% over-the quarter, reaching $0.63 PSF
- Airport Area submarket cluster, which is land-constrained to further growth, led the market in rental rate increases with YOY improvement of 11.2% to $0.80
- Investment sales volume in Q4 outperformed third quarter by 124%, but decreased 0.18% compared to Q4 2019
- Fourth quarter closed with $1.09 billion in sales volume and $2.5 billion in the year
- Median price per square foot increased 9.7% over-the-quarter, and 21.1% year-over-year to $122 PSF
- Cap rates compressed to 6.2%
It will be difficult to outperform this past year, but the same sentiment was felt after closing out 2019. The growth of the market will continue in a positive direction as more out-of-state companies gain enthusiasm for Phoenix and the demand for space remains competitive.
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