PHOENIX, ARIZONA (June 16, 2023) -- Over the past few years, industrial markets have grown dramatically. Several markets like Phoenix have emerged as growth markets, and they are becoming strategically important for operations, as well as attractive opportunities for industrial investors. Cushman & Wakefield recently examined national industrial leasing statistics from 2020-2022 to see which markets, outside of the seven primary industrial markets, performed the best in our six major tenant types.
Phoenix is the emerging market for manufacturing leasing activity. Over the past three years, the Phoenix industrial market saw nearly 10.7 msf of new leasing activity for manufacturing tenants. This number seems low compared to some of the other categories, but manufacturing leasing is far more uncommon than warehouse/distribution leasing. Most manufacturing is specialized, and tenants will opt to own their space, making the stats more impressive.
The Phoenix market added more than 56 msf of new industrial space over the past three years, providing plenty of new space for those looking to enter the market. Tenants like inexpensive, reliable energy and labor, as well as low worker’s comp costs in a right-to-work state. Due to tightening vacancies across other western markets, Phoenix will continue to attract owner/users that desire to be in the west but can’t compete with some of the California pricing and lack of space.
In addition to its ideal geographic location and warm weather, Maricopa county's population increased by 1.3% from July 2021 to July 2022 alone, with the addition of 56,831 new residents, according to the U.S. Bureau of Labor Statistics. This was the largest gain in residents across of any U.S. county during that time. The growth in population contributed to the local economy by attracting occupiers to the area and providing job opportunities. Phoenix wage rates for production workers is at $18.40 per hour, slightly above the U.S. average but well below the rates of the port-proximate California markets that are pushing $21.00 per hour—making it more affordable for occupiers to staff facilities.
Click here to read more: https://www.cushmanwakefield.com/en/united-states/insights/industrial-emerging-markets-by-tenant-type