Market Trends
- Despite seven Class A speculative projects totaling 2.0 million square feet (msf) delivering vacant in the second quarter, negative impacts of surplus supply have yet to materialize as vacancy rates have held steady over the last four quarters.
- The current construction pipeline counts 42.7 msf of speculative construction currently underway, 89% of which remains available. Leasing activity, while still strong, has softened from 2021 and 2022 levels and combined with pending deliveries, will put upward pressure on vacancy.
- Developers continue to bet on the economies and infrastructure that will exist around megaprojects slated for Phoenix, like TSMC, Intel and KORE Power. Of the 183 speculative projects currently underway, 64% of them are in the 50,000-to-200,000-square-foot range.