Market Trends
- Vacancy had yet to see any substantial climbs despite the observed economic cool down. While leasing activity of 4.6 million square feet (msf) is the lowest total since Q4 2020, it is still within ear-shot of the 5-year quarterly average of 5.3 msf.
- Expect upward pressure on vacancy through out the remainder of 2023, with 69% of the second largest construction pipeline in the U.S. available for lease. The Northwest submarket is most at risk from over-building with 15.0 msfunder construction and available.
- Phoenix’s diverse tenant base, as seen with the strong leasing from the Logistics & Distribution/3PL sector this quarter and the manufacturing demand spurred by investments from both TSMC and Intel, will fuel long term demand in the market.