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10/29/18
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Metro Phoenix absorbed more than 5.4 msf of industrial space during the first three quarters of 2018. According to the Q3 2018 Phoenix Industrial Insight report from the Phoenix office of JLL, the market can expect another 1.8 msf of absorption by the end of Q1 2019.
“That absorption will come from the usual suspects, including a lot of e-commerce-related activity and, in early 2019, a notable rise in data center absorption,” said JLL Vice President Riley Gilbert. “That is not surprising when you consider that 30% of all third quarter land sales in the Southwest Valley alone were purchased for data center use.”
According to JLL, around 25% of all absorption in 2018 came from e-commerce companies, including 400k sf during the second quarter, 970k sf during the third quarter and approximately 650k sf expected between now and the end of the year. As much as 56% of Q1 2019 absorption is expected to involve e-commerce-related operations as well.
“Geographically, there is also continued domination by the Southwest Valley, which represents almost 70% of all active metro Phoenix construction activity,” said Gilbert.
Looking ahead, JLL is expecting demand and absorption to continue. That optimism is strengthened even further by the Loop 303 corridor, a new frontier for large users like Ball Manufacturing who are planting their flags in this emerging industrial submarket.
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