PHOENIX, AZ (April 14, 2025)—CBRE Research has published an interesting report on the Phoenix industrial market, which tracked 1.8 million square feet of net absorption in Q1 2025. The metro recorded 7.5 million square feet of net gross absorption, as 2.4 million square feet in renewals were signed across the Valley, and move-ins were dominant in distribution-type assets. Vacancy in the market increased to 12.2% as the 7.4 million square feet of deliveries increased the vacancy base.
Phoenix Q1 2025 Industrial Figures
- The Phoenix industrial market registered 1.8 million sq. ft. of net absorption in the first quarter.
- The metro recorded 7.5 million sq. ft. of gross absorption, as 2.4 million sq. ft. in renewals were signed across the Valley, and move-ins were dominant in distribution-type assets.
- The market's vacant base increased to 12.2% due to 7.4 million sq. ft. of deliveries.
- CBRE tracked an increase of tenant space requirements in the market to start 2025 to 38.8 million sq. ft., a 7.4% increase in demand from Q4 2024.
- Net absorption was 1.8 million sq. ft. in Q1 2025, with distribution properties driving the market with around 2.1 million sq. ft. of net absorption.
- Twenty-seven buildings were delivered for 7.4 million sq. ft. in Q1 2025, down 37.1% in sq. ft. from Q1 2024.
- Construction volume decreased in Q4 2024 with 16.3 million sq. ft. under construction, as the 3.2 million sq. ft. of deliveries surpassed the 2.3 million sq. ft. of starts.
- Quarter-over-quarter, the vacancy rate rose 100 bps to 12.2%.
CBRE tracked an increase in tenant space requirements in the market to start 2025 of 38.8 million square feet, a 7.4% increase in demand from Q4 2024.