Phoenix’s top four industrial leases totaled 4.6 million sq. ft.
PHOENIX – April 4, 2023 – Demand for industrial & logistics warehousing space is driving an increase in megawarehouses, according to a CBRE report. Phoenix had four of the largest 100 industrial lease transactions in 2022.
Nationally, a record 63 signings for 1 million sq. ft. or more were among the top 100 industrial lease transactions in 2022, up from 57 in 2021. The top 100 in 2022 had an average size of 1.07 million sq. ft., compared with 1.05 million sq. ft. in 2021. Twenty-four of the top 100 were renewals, six more than in 2021, indicating that more occupiers are opting to remain in their current facilities.
Traditional retailers/wholesalers accounted for 53 of the top 100 deals, expanding their footprints to accommodate e-commerce sales growth and store more inventory. Third-party logistics (3PL) operators signed 18 of the top leases, up from only 10 in 2021, and seven of which were for 1 million sq. ft. or more versus just two in 2021. E-commerce companies followed with 14 of the top 100, down from 21 in the previous year.
In 2022, Phoenix had four of the top 100 leases for a total of 4.6 million sq. ft. of industrial space, with two of the leases being traditional retailers/wholesalers. E-commerce had the largest square footage leased in the Valley at 1.2 million sq. ft., and third-party logistics (3PL) secured 1.2 million sq. ft. in Glendale.
"With four leases over 1 million sq. ft. in 2022, Phoenix is evolving into a retailer/wholesaler and distribution-focused market," said Cooper Fratt, executive vice president at CBRE. "When selecting regional distribution center locations, Phoenix continues to attract occupiers with a robust and affordable labor market and fewer business regulations than other locations across the region.”
Representing over half of the top 100 leases, traditional retailers/wholesalers expanded their footprints to accommodate e-commerce sales growth and to hold more inventory to guard against supply chain disruptions. Third-party logistics (3PL) operators took second place, signing 18 of the top leases, up from 10 in 2021. E-commerce companies followed closely behind with 14 of the top 100, down from 21 in 2021.
Overall, the average size of the 100 top leases was 1.07 million sq. ft., compared to 2021’s previous record of 1.05 million sq. ft. Top markets for these leases included traditional mainstays like the Inland Empire, Chicago and Atlanta, as well as growing markets such as Dallas-Fort Worth, Phoenix, and Columbus.
Top 10 Leading Markets for Top 100 Lease Transactions in 2022
To read the full report, please click here.