The Phoenix industrial sector remained steady this quarter with vacancy continuing to decline and net absorption remaining positive. The overall Phoenix vacancy rate fell slightly this quarter to 12.1%, down from 12.5 % posted at the mid-year point. This brings vacancy rates down almost a full percentage point compared to the same quarter in 2013 when the rate was 13.2%. The Southwest Valley posted the highest vacancy rate at 14.7%, while the Northwest Valley posted the lowest at 9.0%.
As the Metro Phoenix office sector approaches year end, market indicators continue to show slow but steady improvements. With vacancy rates continuing to decline and rental rates steadily increasing, 2014 has lived up to the predictions as a year of positive transition. With 599,262 SF delivered this quarter, the largest total delivery since the beginning of 2012, and over 2.4 million SF still under construction, the positivity continues as the sector ramps up for a busy 2015.
“The Phoenix commercial real estate market is continuing to recover quarter over quarter albeit slowly but surely. This increase in activity is touching every product sector; Office, Retail, Industrial and Investment. While vacancy rates continue to decline, some pricing has increased, and absorption has been positive, with submarkets in the valley in all products showing increased activity. The Phoenix market seems to be more confident than the actual economy might dictate, but Phoenix is drawing positive attention nationally in many areas and consumer confidence is following. Most agree that 2014 is a good foundation for 2015, which will be the year when RECOVERY will be spelled with capital letters.”