PHOENIX — The strength of the Phoenix industrial market is expected to continue even as some developers pause projects in the Valley due to rising inflation.
"The theme of our Q3 numbers is that Phoenix is still very much on fire with respect to all types of activity, breaking records with how much is under construction, what we're delivering, we're breaking records with how much tenant demand there has been," said Jackie Orcutt, a senior vice president for Dallas-based CBRE Group Inc., who works out of the firm's Phoenix office.
The Phoenix metro had about 35.2 million square feet of industrial space under construction in the third quarter, CBRE data shows, while the vacancy rate increased only slightly to 3.1% from 2.8% in the previous quarter. But the only reason vacancy increased, Orcutt said, is because the back-office vacancy rate is included in the overall industrial figure.
"If you remove that in our market, vacancy is at 2.6%, which is a decrease from the previous quarter," she said. "Unfortunately, call centers and insurance companies and other providers have continued to opt to work from home or haven't really been absorbing a lot of the product that they would."
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