Phoenix Industrial Market Continues Upward Momentum
The Greater Phoenix industrial market delivered a standout performance in the third quarter, positioning itself among the nation’s top-performing cities for industrial real estate.
According to a recent report by Colliers, net absorption in the region surged nearly threefold from the previous quarter, reaching a robust 7.87 million square feet. Meanwhile, the market posted a significant vacancy rate drop of 110 basis points, settling at 9.8%—a clear sign of strengthening demand.
This positive trajectory was driven in part by a slowdown in new industrial space deliveries alongside solid leasing activity. As a result, Phoenix notched two consecutive quarters of decreasing vacancy—marking the first back-to-back decline since the third quarter of 2022.
Both direct and sublease availabilities declined during the period, further indicating resilient tenant interest throughout the market. Sublease availability closed the quarter at 7.65 million square feet, representing just 1.7% of total industrial inventory. All submarket clusters, with the exception of the Airport Area, reported quarter-over-quarter drops in vacancy.
Phoenix’s continued industrial upswing is backed by several key fundamentals, including steady population growth, strong employment gains, and an increasingly diversified economic base. These elements are expected to sustain the city’s momentum and keep it among the nation’s most dynamic industrial hubs heading into 2026.
