Speculative construction proving to be the accelerant of rising vacancy
Vacancy in the Phoenix industrial market ticked above 16.0% to begin 2025, a 450-basis-point (bps) climb from just 12 months prior. The delivery of speculative construction projects across the market continues to be the catalyst for higher vacancy. In Q1 2025, 7.5 million square feet (msf) of new construction delivered, of which 76.0%, or 5.7 msf, were speculative projects. Of the total deliveries cited for the first quarter, 5.2 msf remained available at the close of the quarter, accounting for nearly 9.5% of current vacant square footage in the market.