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2022 Q3 Greater Phoenix Industrial Market Knowledge Report

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By Phillip Hernandez, Research Manager | Arizona

Q3 2022 Industrial Market

Net absorption in the third quarter ended at 4.9 million square feet, bringing the year-to-date total to 21.6 million square feet. The first nine months of 2022 have almost matched the net absorption posted for the entire year 2021, falling just shy of 2.5 million square feet. Vacancy dropped to a new historic low of 2.4 percent. There were 5.8 million square feet of new inventory delivered in third quarter, bringing the year-to-date total to 18.0 million square feet. A staggering 40.9 million square feet of industrial product is under construction. 

Key Takeaways:
  • Rental rates have increased over 22.9 percent year-over-year
  • The amount of product under construction increased 16.1 percent quarter-over-quarter to 40.9 million square feet 
  • 4.9 million square feet of positive net absorption, bringing the year-to-date total to 21.6 million square feet 

With the fear of a recession in the near term, the Industrial Market in Phoenix has managed to continue outperforming every other sector in the market and is showing healthy performance in the third quarter. The industrial labor market is also experiencing improvement due to the growth of the market. 

The Phoenix industrial market does not anticipate a slow down in the near term, and each quarter the market outperforms the previous, setting new records. The third quarter lived up to the hype, following previous quarterly trends. 

Outlook:
Despite the increase of product under construction, vacancy remains extremely compressed due to elevated tenant demand, and continues to put upward pressure on rental rates. The quickly accelerating rental rates have also been driving up the annual escalation steps in lease negotiations. This is starting to hurt smaller companies that have trouble adapting to the current market when negotiating renewals. 
2022Q3IndustriallMarketResearchPhoenixColliersSRC

2022 Q3 Greater Phoenix Industrial Market Knowledge Report

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Related Experts
Phillip Hernandez | Colliers | Phoenix

Phillip Hernandez

Director, Research | Arizona

Phoenix

+1 602 222 5066
+1 520 404 5200
Email

As research manager for Colliers in Arizona, Phillip Hernandez is responsible for proactively developing and implementing research objectives and directing all research activity for the Arizona offices.

He provides leading-edge, thought-provoking research and analysis of market data for use in producing quarterly statistical market reports for each property discipline, as well as other ad hoc reports, research projects and presentations. Phillip analyzes and interprets real estate trends and maintains a database of economic indicators to provide forecasts.

Regardless of the property type or sector, Phillip believes each has a story to tell and that data provides the opportunity to redefine the narrative. With a background in location analytics, he is highly experienced in interpreting complex data sets. Using the latest technology, Phillip developed a system to blend analytics with a visually attractive approach to bring data to life.

Focusing on business development, he leverages market intelligence and insights for thought leadership content strategy in support of client engagement. His goal is to strategically align research and business development efforts and present research in an easily digestible format that promotes Colliers’ market share and revenue growth.

Colleagues describe Phillip as a brilliant storyteller and a passionate, creative and experienced professional.

Prior to joining Colliers, he served as a business analyst at CBRE, where he specialized in creating tailored research reports, as well as unique and interactive applications and dashboards that elevated the market position of assets. Phillip delivered weekly research updates, with relevant lease and sale comps, custom competitive sets and current market activity.

He provided complex market and trend analyses, monitored an extensive database of proprietary market data, and delivered custom quarterly and annual reports that were strategically positioned towards targeted clients. He also led weekly department research meetings to develop initiatives surrounding market trends, produce innovative industry solutions and analyze client-centric objectives.

Previously, Phillip was a GIS analyst for the central region of CBRE. Working exclusively with top-performing markets, he created unique models that illustrated custom real estate datasets through location analytics. Phillip produced high-quality geographic and demographic maps, and investigated multiple approaches to storytelling through map and market analytics.

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John Archer | Colliers | Phoenix

John Archer

Researcher

Phoenix

+1 602 222 5105
Email

As a research analyst for Colliers in Arizona, John Archer delivers in-depth analysis of current market conditions and trends for brokerage professionals and their clients. He compiles market statistics across all property disciplines, including industrial, office, retail, healthcare, multifamily and land.

Using various in-house and online resources, John monitors real estate transactions and dissects data to analyze and understand what is happening throughout the various property sectors of commercial real estate. John researches and prepares data and background narrative information for market reports and proposals for use by brokers, staff and management, to serve the interests of Colliers’ clients.

Applying his strong background in analytics and research, John tracks all aspects of the commercial real estate market to illustrate and interpret real estate and economic trends. He leverages that knowledge on behalf of Colliers and its clients. John also maintains sales and lease comp databases, monitors tenants-in-the-market activity, and responds to ad hoc research requests.

Clients and colleagues describe John as an outgoing, accountable and respectful professional who collaborates with the team to provide outstanding service to Colliers and its clients. He excels in a deadline-driven environment.

Prior to joining Colliers, John was a real estate agent with the Barclay Group, where he focused on zoning and site selection for property developments. He was also responsible for preparing competitor analyses to dissect performance data.

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