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.
In the midst of the COVID-19 outbreak, information and data is emerging at a quick and uneven rate. The information contained herein has been obtained from sources deemed reliable at the time the report was written. While every reasonable effort has been made to ensure its accuracy, we cannot guarantee it. No responsibility is assumed for any inaccuracies. Readers are encouraged to consult their professional advisors prior to acting on any of the material contained in this report.
