Phoenix - AZ · 2019. 12. 27. · the e-commerce, logistics, and construction industries. Phoenix...

Phoenix - AZ

PREPARED BY

Craig Trbovich

Vice President - Sales & Leasing

Industrial Market Report

INDUSTRIAL MARKET REPORT

Market Key Statistics 2

Leasing 3

Rent 8

Construction 10

Under Construction Properties 12

Sales 14

Sales Past 12 Months 16

Economy 18

Market Submarkets 21

Supply & Demand Trends 25

Rent & Vacancy 27

Sale Trends 29

Phoenix Industrial

12/27/2019Copyrighted report licensed to Commercial Properties, Inc. - 475572.

OverviewPhoenix Industrial

7.5 M 6.4 M 6.8% 5.4%12 Mo Deliveries in SF 12 Mo Net Absorption in SF Vacancy Rate 12 Mo Rent Growth

Strong population and job growth in the Valley of the Sunare bolstering a rapidly growing consumer base in theregion and generating industrial demand.

Approximately 35 million consumers can be reachedwithin a single day’s truck ride from metro Phoenix,fueling demand for industrial space among companies inthe e-commerce, logistics, and construction industries.Phoenix has also become one of the most active datacenter markets in the country, not only because of thevast consumer base but also due to Arizona's taxincentive for data center development, a robust andgrowing power grid, and limited occurrence of naturaldisasters.

With relatively few barriers to development, a flourishinglocal economy, and favorable demographics, newindustrial supply has consistently poured into the market.New development is primarily tailored to the logisticssegment, which accounts for the bulk of completions.Even with elevated levels of construction, strong demand

has maintained a vacancy rate well below the market'shistorical average.

Many companies established industrial operations inPhoenix because of the low cost of doing business andproximity to major regional markets, particularly inCalifornia. The average industrial rent in Phoenix isnearly 5% below the national average, and the discountis considerably higher compared to rents in keyCalifornia metros. Rent growth has trailed the nationalaverage in past years, but Phoenix is now generatingabove-average rent gains as the rest of the U.S.regresses.

Metro Phoenix remains a liquid market this year after arecord-setting 2018. Sales volume exceeded $2.2 billionlast year, an all-time high, and pricing also reachedunprecedented levels. Institutional investors continue tomake big splashes in 2019, particularly in West Valleyindustrial hubs.

KEY INDICATORS

Market RentVacancy RateGIACurrent Quarter Availability RateNet Absorption

SFDeliveries SF

UnderConstruction

$7.657.9%232,375,911Logistics 12.5% 1,567,393 721,948 8,876,179

$8.293.4%84,596,578Specialised Industrial 5.4% (75,320) 311,548 3,004,790

$13.468.1%34,048,706Light Industrial 11.5% 351,582 660,963 38,073

$8.356.8%351,021,195Market 10.7% 1,843,655 1,694,459 11,919,042

ForecastAverage

HistoricalAverage

12 MonthAnnual Trends Peak When Trough When

8.2%10.0%0.1%Vacancy Change (YOY) 16.6% 2010 Q1 6.6% 2006 Q3

6,323,0005,549,8606.4 MNet Absorption SF 12,720,168 2014 Q3 (6,576,494) 2009 Q3

9,265,6286,521,9047.5 MDeliveries SF 15,140,732 2008 Q3 1,102,949 2011 Q2

2.5%1.6%5.4%Rent Growth 6.7% 2019 Q2 -9.5% 2009 Q4

N/A$1.1B$2.9 BSales Volume $2.5B 2019 Q3 $318.5M 2009 Q3


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LeasingPhoenix Industrial

Strong demand from e-commerce and third-partylogistics tenants have mitigated supply-driven pressureon fundamentals. Developers are attempting to keep upwith the pace of robust demand for industrial space. Onan annual basis, net absorption has consistentlyoutpaced new supply since 2010, with the exception of2013. Sustained demand has put steady downwardpressure on vacancies since reaching a peak of 16.5% in10Q1, pushing the average rate down to 6.8%.

Demand has moderated from peak activity in 2017,where net absorption reached 11.1 million SF. Netabsorption over the past 12 months totaled 6.4 million,which is still healthy and in line with the market'shistorical average. Several large move-outs hinderedmore substantial net absorption in 2019. Ulta, Nestle,and Tesla each vacated more than 300,000 SF in 19Q2.However, expanding tenants have offset the impact.Companies are scouring the market for large blocks ofavailable space. Construction levels remain elevated thisyear after last year's deliveries reached their highestmark in a decade.

The Valley's industrial market continues to strengthendespite the slowdown of one of the most significantdemand drivers from the last cycle: the single-familyhousing market. During the peak years of the housingboom, companies associated with single-family homeconstruction drove leasing for industrial space inPhoenix. With housing starts below their prerecessionpeak, this source of demand has diminished this cycle.

A range of tenants has filled the demand gap. E-commerce, third-party logistics, and manufacturing firmsare capitalizing on Phoenix’s fast-growing population,strong economic and demographic trends, and proximityto major markets, particularly those in California. Majormove-ins this year include Nike (902,000 SF), Amazon(568,350 SF), Z Modular (222,000 SF), States Logistics(211,200 SF), Brooklyn Bedding (140,700 SF), Walmart(121,900 SF), and Caraustar Industries (110,700 SF).

Perhaps due to the relative ease of building andsusceptibility to boom-bust cycles, vacancies in themetro area tend to trend higher than the nationalaverage. Although Phoenix's vacancy rate consistentlysits above major U.S. markets, the rate has fallen tohistoric lows for the metro.

Along with a rapidly expanding population, Phoenix hasemerged as one of the fastest-growing data centermarkets in the nation. A minimal threat of naturaldisasters, a robust and expanding power grid, and statetax incentives for data center developers are helping todrive this segment of the market. Underscoring thistrend, Microsoft recently began construction on two datacenters in Goodyear about 10 miles apart. Upon fullbuild-out, the facilities will total nearly 1 million SF.

Other major tech and telecommunications players withdata center needs include Apple and Google in Mesa,Cox Communications in Deer Valley, PayPal in CentralPhoenix, and Verizon Wireless in Tempe. According tothe U.S. Energy Information Administration, Arizona'sPalo Verde Nuclear Generating Station is the largestnuclear power plant, the largest net generator ofelectricity, and the second-largest power plant bycapacity in the nation.

Strong income growth in the Phoenix area is anencouraging sign for the wealth of logistics providers thatdepend on disposable incomes. The metro’s medianhousehold income often grows at a faster rate than thenational average. In 2018, Arizona ranked fifth in theU.S. for personal income, according to the U.S. Bureauof Economic Analysis.

Another project in the state, SkyBridge Arizona, isexpected to stimulate additional demand in the EastValley. Last year, Arizona Governor Doug Duceyannounced plans to create the U.S.’s first internationalair cargo hub at Phoenix-Mesa Gateway Airport, dubbedSkyBridge Arizona. The SkyBridge will have both U.S.and Mexican customs at the airport to facilitate fasterand more cost-efficient trade between the two nations.The rise of e-commerce and increased demand forfaster delivery times in the U.S. and Latin Americaprecipitated the development of SkyBridge Arizona,which could be another source of future growth forPhoenix's industrial market.

Despite healthy demand, net deliveries are expected tosurpass net absorption, lifting vacancies. This trend isprojected to continue as demand softens due to theexpected economic slowdown. Still, average vacanciesare expected to remain relatively tight and below themarket average over the forecast period.


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NET ABSORPTION, NET DELIVERIES & VACANCY

VACANCY RATE


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AVAILABILITY RATE


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12 MONTH NET ABSORPTION SF IN SELECTED BUILDINGS

3rd QtrBuilding Name/Address Submarket Bldg SF Vacant SF

1st Qtr 2nd Qtr 4th Qtr 12 Month

Net Absorption SF

Goodyear Ind 901,700 0 0 0 901,700 0 901,700Lincoln 40 Logistics

Chandler Ind 630,000 0 0 0 0 630,000 630,000Park Place

SW N of Buckeye Ro… 568,340 0 0 568,340 0 0 568,34010 West Logistics Center Phase II

Tolleson Ind 682,291 129,961 211,185 0 276,165 (129,961) 360,214Logistics 75

Tempe Northwest Ind 307,000 0 0 0 307,000 0 307,000Iron Mountain Data Center Phas…

Glendale Ind 263,606 0 0 0 0 263,606 263,606Daimler

Surprise Ind 273,357 54,335 164,522 0 54,500 0 219,02213600 W Sweetwater Ave

Goodyear Ind 418,200 200,000 418,200 0 0 (200,000) 218,200Southwest Logistics Center

SC S of Salt River Ind 393,484 191,010 73,289 0 129,003 (10) 202,282Airport Logistics Center

Deer Vly/Pinnacle Pk… 200,000 0 0 0 200,000 0 200,000Aligned Data Center Phase II

SW N of Buckeye Ro… 187,920 0 0 0 0 187,920 187,920777 S 67th Ave

Tolleson Ind 186,336 0 0 0 186,336 0 186,336Tolleson 94

Tempe Northwest Ind 227,491 0 0 0 0 182,949 182,920Hub 317

Chandler N/Gilbert Ind 180,000 0 0 0 180,000 0 180,000Edgecore Mesa Campus

Tolleson Ind 417,600 232,553 0 0 0 185,047 166,89091st Avenue Logistics Hub

Surprise Ind 160,000 0 0 160,000 0 0 160,000SeaCa Packaging

Tolleson Ind 568,282 0 155,794 0 0 0 155,794Durango Commerce Center

6,565,607 807,859 1,022,990 728,340 2,234,704 1,119,551 5,090,224Subtotal Primary Competitors

344,455,588 23,068,721 (295,473) 309,690 443,428 724,104 1,317,427Remaining Phoenix Market

351,021,195 23,876,580 727,517 1,038,030 2,678,132 1,843,655 6,407,651Total Phoenix Market


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TOP INDUSTRIAL LEASES PAST 12 MONTHS

Building Name/Address Submarket Leased SF Tenant Name Tenant Rep Company Leasing Rep CompanyQtr

SWC Indian School & Cotton Ln Glendale 643,798 Ferrero Rocher Chocolate - CBREQ2 19

1755 S 75th Ave Tolleson 422,370 States Logistics - JLLQ1 19

2060 S 51st Ave * SW S of Buckeye Road 319,860 Royal Paper Converting - -Q2 19

17017 W Indian School Rd Glendale 263,606 Daimler CBRE CBREQ1 19

6205 S Arizona Ave Chandler Airport 222,000 Z Modular KW Commercial Nor… Lee & AssociatesQ1 19

9494 W Buckeye Rd Tolleson 186,336 CHEP Pallets - CBREQ1 19

670 S 91st Ave Tolleson 185,047 Summit Shipping - CBREQ4 19

100 N 61st Ave SW N of Buckeye Road 181,325 Sendoso - CBREQ3 19

13351 W Rioglass Solar Rd Glendale 170,625 National Indoor RV Center Commercial Properti… Sorensen & BlackQ2 19

317 S 48th St Tempe Northwest 154,813 Integrated CBD JLL Lee & AssociatesQ3 19

5310 W Camelback Rd * Grand Avenue 150,686 Corning Incorporated JLL -Q4 18

6200 W Van Buren St SW N of Buckeye Road 136,808 Geodis - Cushman & WakefieldQ4 19

6200 W Van Buren St SW N of Buckeye Road 136,808 Toyota - Cushman & WakefieldQ4 19

3333 S 7th St SC S of Salt River 129,003 Amazon - Cushman & WakefieldQ1 19

901 S 86th Ave Tolleson 121,895 Walmart - Lee & AssociatesQ2 19

6565 W Frye Rd Chandler 118,383 Isola Group JLL CBREQ2 19

200 N 99th Ave Tolleson 109,935 Cintas - Cushman & WakefieldQ1 19

777 S 67th Ave SW N of Buckeye Road 109,620 United Foods International - Colliers InternationalQ2 19

5302 W Buckeye Rd SW N of Buckeye Road 108,255 Royal Paper - JLLQ4 19

7775 W Buckeye Rd Tolleson 107,922 Walmart - JLLQ3 19

2401 W Grandview Rd Deer Vly/Pinnacle Pk 99,915 Caverta JLL CBREQ3 19

443 W Alameda Dr Tempe Southwest 97,603 - Lee & Associates JLLQ2 19

1601 E Broadway Rd SC S of Salt River 90,194 Exotic Metals - Colliers InternationalQ2 19

555 S 65th Ave SW N of Buckeye Road 86,939 SleepComp West - Colliers InternationalQ1 19

1002 S 63rd Ave SW N of Buckeye Road 86,034 United Food - Colliers InternationalQ3 19

1524 W 14th St Tempe Northwest 81,572 Vitalant - JLLQ3 19

7825 S Hardy Dr Tempe Southwest 78,996 Zero Mass Water - CBREQ3 19

777 S 67th Ave SW N of Buckeye Road 78,300 VGM - Colliers InternationalQ3 19

7535 E Ray Rd Chandler N/Gilbert 74,030 Greenfiber Cushman & Wakefield Lee & AssociatesQ4 19

3333 S 7th St SC S of Salt River 73,471 Sonny's JLL Cushman & WakefieldQ1 19

709 E Auto Center Dr Chandler N/Gilbert 72,591 Amphenol - Lee & AssociatesQ3 19

1502 E Hadley St SC N of Salt River 69,809 - - Harrison PropertiesQ2 19

1115 W Alameda Dr Tempe Southwest 68,585 Sun Orchard CBRE CBRE;Harrison Propert…Q2 19

500 N 54th St Chandler 68,000 Dexcom - CBREQ2 19

640 S 51st Ave SW N of Buckeye Road 65,268 - - Cushman & WakefieldQ1 19

475 E Buckeye Rd SC N of Salt River 63,750 - - Harrison PropertiesQ2 19

18008 N Black Canyon Fwy Deer Vly/Pinnacle Pk 63,220 PMA Photometals - CBREQ3 19

7375 W Buckeye Rd Tolleson 62,662 - - Lincoln Property Comp…Q1 19

291 E El Prado Ct * Chandler N/Gilbert 62,000 International Flora Tech - -Q2 19

8701 W Jefferson St Tolleson 57,135 - - Lee & Associates;Maje…Q3 19

*Renewal


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RentPhoenix Industrial

After years of underperforming relative to the nationalbenchmark, Phoenix rent growth rebounded andoutpaced the U.S. average since the start of 2019.Nevertheless, Phoenix rent growth has started todecelerate from a high of 6.7% in 19Q2 to 5.4% yearover year but remains well above the market’s historicalaverage.

Some submarkets have achieved robust rent growth,while others have lagged. High-demand submarkets thathave received quality new inventory are leading themarket in rent growth. The Chandler Airport, Tolleson,Goodyear, and Surprise submarkets have posted rentgrowth above 6% over the past 12 months.

The wave of speculative deliveries in Phoenix couldcontinue to be a headwind to rent gains as they havebeen in the past. Typically, about 60% of industrial spaceunder construction is available for lease at any giventime, but that share was closer to 70% in December.

Nevertheless, Phoenix’s promising population, job, andincome growth should continue to underpin strongindustrial demand and above-average rent growth in thenear term. The average market rent in the Valley recentlysurpassed the prerecession peak due to consistentlyrobust gains in the past several years.

MARKET RENT GROWTH (YOY)


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RentPhoenix Industrial

MARKET RENT PER SQUARE FOOT


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ConstructionPhoenix Industrial

Following two years of heightened construction activity,momentum slowed in 2019. Net completions areexpected to reach 6.7 million SF by year end, down fromlast year's level.

Construction starts picked up in late 2019, though.Robust buyer and investor demand and moderate supplyhave motivated developers. Approximately 11.9 millionSF is under construction, and 38% of the space ispreleased. Several large projects will deliver next year,and net completions in 2020 are expected to reach adecade high.

The majority of new supply is concentrated in the WestValley. The region’s proximity to California and relativeaffordability have fueled demand for manufacturing anddistribution space. Major transit networks, including I-10,I-17, and the Union Pacific and BNSF railroads, supportfirms that serve West Coast markets. Recentinfrastructural improvements, including the expansions ofLoop 303 and Loop 202, have helped traffic flow andcontributed to rapid population growth in several WestValley bedroom communities.

Key submarkets that encompass the WestValley—Tolleson, SW N of Buckeye Road, and SW S ofBuckeye Road—contain more than 25% of the metro’sexisting stock and often receive the bulk of newdeliveries. When construction activity returned to themetro in 2013, more than half of the space was in thesethree submarkets alone.

However, the share of new supply going to this area isdecreasing. Only about one-third of deliveries in2017–18 were located here, as developers branched outto other submarkets. The area around Phoenix SkyHarbor International Airport has seen an uptick indevelopment recently, as have several submarkets in theoutlying areas of the West Valley and Southeast.

For example, the Glendale and Goodyear submarketsstand out as up-and-coming hotspots for development.These two submarkets account for one-third of the

space underway in the market. Inventories haveexpanded rapidly in Glendale and Goodyear in the pastseveral years, coinciding with the expansion of Loop 303.Local developer Merit Partners has been particularlyactive in the Glendale Submarket. The firm delivered618,000 SF at PV/303 in 2017, which UPS fully leased.In 2018, it completed the second phase, totaling 640,000SF, and XPO Logistics took the entire space.

Developers have also zeroed in on the southeasternregion, which includes Mesa, Chandler, and Gilbert.About 2.9 million SF is underway in this area. High-skilllabor and quality infrastructure in the area continue todraw advanced manufacturing and data center users.EdgeCore Mesa Campus, a 180,000-SF data center,recently completed in Mesa’s Elliot Road TechnologyCorridor. Prominent employers including Intel, Boeing,and Northrup Grumman also attract ancillary businessesand firms in their supply chain.

The largest project underway is The Hub at Goodyear,located off I-10 on Bullard Avenue. Clarius Partnersbroke ground on the 790,980-SF speculative distributioncenter in February. The project is fully available andslated for completion in 20Q1.

Other highly anticipated projects in the West Valleyinclude four Microsoft data centers. A 500,000-SFMicrosoft data center is currently underway in Goodyearat Indian School and Citrus Road, with constructionexpected to reach completion in 20Q1. About 12 milesnorth in El Mirage is another 254,000 SF data center thatis expect to deliver in April 2020 at Olive Avenue andDysart Road. Lastly, south of I-10 and the PhoenixGoodyear Airport is another Microsoft site, dubbed PHX-10. PHX-10 is currently underway, totaling 245,000 SF,while PHX-11 is in the planning pipeline and will includean additional 243,000 SF of space.

In Glendale, a 643,800-SF manufacturing facility isunderway. Ferrero Rocher Chocolate fully leased the 5Star industrial space before its completion in 20Q2.


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ConstructionPhoenix Industrial

DELIVERIES & DEMOLITIONS

SUBMARKET CONSTRUCTION

Average Building Size

RankUnder Constr

Under Construction Inventory

All ExistingSF (000) Pre-Leased SF (000)SubmarketNo. RankBldgs Pre-Leased %

1 Tolleson 16 3,037 189,7820% 7 157,7650 3

2 Glendale 10 2,916 291,56781.6% 1 79,4932,379 1

3 Goodyear 8 2,124 265,48514.8% 3 74,072315 2

4 Chandler N/Gilbert 10 1,200 120,03514.6% 4 26,960175 6

5 Chandler Airport 8 837 104,6022.0% 6 37,86916 8

6 SW N of Buckeye Road 3 552 183,84932.9% 2 46,281181 4

7 North Airport 4 471 117,8500% 7 21,4360 7

8 SW S of Buckeye Road 2 348 173,7780% 7 59,7040 5

9 Deer Vly/Pinnacle Pk 6 217 36,16511.0% 5 25,20024 10

10 Falcon Fld/Apache Jct 2 134 67,1230% 7 20,8560 9

All Other 5 84 16,81523.8% 25,18720

Totals 74 11,919 161,06826.1% 31,9953,111


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Under Construction PropertiesPhoenix Industrial

76 12,575,684 4.0% 30.0%Properties Square Feet Percent of Inventory Preleased

UNDER CONSTRUCTION PROPERTIES

UNDER CONSTRUCTION

Property Name/Address Rating Bldg SF Floors Start Complete Developer/Owner

Feb-2019305 S Bullard Ave

The HUB at Goodyear790,980 1 Jan-2020

Clarius Partners, LLC

Walton Street Capital, LLC1

Nov-2019SEC Reems Rd & Peoria…

RRB Beverage700,000 1 Jan-2021

Ball Corporation

Ball Corporation2

Jun-2019SWC Indian School & Cott…

Ferrero USA Build to Suit643,798 1 Jun-2020

First Industrial Realty Trust, Inc.

First Industrial Realty Trust, Inc.3

Jun-2019SE Indian School Rd & Pe…

Microsoft500,000 1 Jun-2020

Sundt Construction

Microsoft Corporation4

Mar-20194395 S Cotton Ln

Andersen Corp500,000 - Jan-2020

The Opus Group

Andersen Corp5

Oct-20198046 E Ray Rd

486,000 1 Jun-2020-

Marwest Enterprises6

Dec-2019NEC Bullard Ave & Yuma Rd

Building 2428,037 1 Jun-2020

Prologis

Prologis7


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http://gateway.costar.com/Gateway/Redir/RedirectToProduct.aspx?productId=PPW&redirUrl=%2Fredir%2Fdefault.aspx%3Feid%3D10736710%26ProductMode%3DProperty%26external%3D1







Under Construction PropertiesPhoenix Industrial

UNDER CONSTRUCTION

Property Name/Address Rating Bldg SF Floors Start Complete Developer/Owner

Jul-2019SWC 101st Ave & Roosev…

Building 2409,254 1 Apr-2020

Seefried Properties, Inc.

Seefried Properties, Inc.8

Apr-20197875 W Buckeye Rd

Park 79- Bldg 2347,645 1 Jan-2020

Hines

Hines9

Aug-2019100 N 61st Ave

Prologis Loop 202 @ I-10330,842 1 Feb-2020

Prologis

Prologis, Inc.10

Jun-2019Cotton Ln & Thomas Rd

Fairlife280,000 1 Nov-2020

Fairlife

Merit Partners, Inc.11

Oct-20199393 W Buckeye Rd

Building 1256,000 1 May-2020

Marwest Enterprises


Oct-2019W Olive Ave

Microsoft254,000 1 Apr-2020

-

-13

Apr-2019W Broadway Rd & S Bulla…

PHX-10244,666 1 Jan-2020

Microsoft Corporation

Microsoft Corporation14

Oct-20191500 S 91st Ave

Building 3243,360 1 May-2020

Marwest Enterprises


Jul-2019SWC 101st Ave & Roosev…

Building 1242,521 1 Apr-2020

Seefried Properties, Inc.

Seefried Properties, Inc.16

Oct-20199191 W Buckeye Rd

Building 2229,030 1 Jul-2020

Marwest Enterprises


Dec-2019NEC Bullard Ave & Yuma Rd

Building 3228,605 1 Jun-2020

Prologis

Prologis18

Nov-2019NW Yuma Rd & Bullard Ave

Compass Datacenter - Bl…227,000 1 Apr-2020

Compass Datacenters

Compass Datacenters19

Oct-20192200 S 48th Ave

Liberty Riverside Center…223,917 1 Jun-2020

Liberty Property Trust

Liberty Property Trust20

Apr-20197825 W Buckeye Rd

Park 79- Bldg 1222,147 1 Jan-2020

Hines

Hines21

Jun-20197200 W Roosevelt St

216,880 1 Feb-2020-

-22

Oct-2019215 N 143rd Ave

213,000 1 Jun-2020Baker Development Corporation

Foundation Capital Partners23

Oct-20193030 S 40th St

Building 1211,900 1 May-2020

Conor Commercial Real Estate

Conor Commercial Real Estate24

Jul-201910500 W Glendale Ave

Mack Industrial at Westg…181,853 1 Jun-2020

The Mack Company

The Mack Company25

Nov-2019620 S 91st Ave

174,000 1 Apr-2020-

-26

Jul-20194465 E Nunneley Rd

153,275 1 Jan-2020Trammell Crow Company

Principal Capital Group, Inc.27

Jul-20194615 W McDowell Rd

146,500 1 Feb-2020Southwest Regional Council of C…

Sun State Builders28


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SalesPhoenix Industrial

Investors remain bullish on Phoenix's industrial market,and transaction activity picked up in the second half ofthe year. Sales volume over the past 12 months totaled$2.9 billion, up from last year's record level of activity.Intense buyer competition has put upward pressure onpricing. The average price of $110.00/SF is just belowthe U.S. Even with the rise in pricing, an average caprate in the 6.5%–7% range remains attractive toinvestors.

More than 5.5% of inventory has traded annually since2012, making this one of the more liquid markets in theSouthwest. About 8% of stock turned over last year, thehighest mark in more than a decade. The mostprominent investors are coming from outside of the state.More than 20% of transactions this year have involvedCalifornia-based buyers.

While the majority of transactions in the Phoenix marketare priced below $3 million, a handful of deals tradedabove $20 million this year. One of the largest tradesduring the year was Nike’s purchase of Lincoln 40Logistics Center for $69.8 million in August. The athleticapparel retailer acquired the recently delivered 901,000-SF warehouse in Goodyear, which will house themanufacturing of sole cushions. The 5 Star facility has a40-foot clear height ceiling and is strategically locatedwithin a foreign trade zone and near Interstate 10.

In November, Lexington Realty Trust purchased theChewy Distribution Center for $67 million ($84/SF) fromNorthPoint Development. The 800,000-SF distributionbuilding delivered in 2018 and is fully occupied by

Chewy.com.

In September, Vital Pharmaceuticals acquired 43rdAvenue Logistics Center for $47.7 million ($120/SF) fromCohen Asset Management, Inc. The 394,780-SF facilitywas previously home to Nestle, which closed itsoperations and left the facility vacant in 19Q2.Owner/user Vital Pharmaceuticals, which producesenergy drinks, will move into the space in 20Q3 andcreate up to 300 jobs.

New York-based Nuveen Real Estate acquired a320,000-SF, Class A distribution center from MatrixProperties for $29.5 million ($92.23/SF) in July. Thecenter is 100% occupied by Royal Paper Converting, Inc.

Los Angeles-based BH Properties acquired theHoneywell Aerospace campus in Glendale for $26.5million ($105.03/SF) from New York-based LexingtonRealty Trust in April. Honeywell fully occupies the facilityand has a 2024 lease expiration. The 252,300-SF, ClassA industrial campus is conveniently located off the Loop101 and 59th Avenue and features 35-foot clear heightsand two loading dock.

In February, Dallas-based Stream Realty Partnersacquired Southwest Logistics Center in Goodyear for $42million. The deal included a 418,000-SF distributionwarehouse situated on 24 acres and two parcels to thesouth totaling 127 acres. The property sat vacant since2017. The buyer will use the asset for its Stream DataCenter by 2020, with plans to expand on the twoadjacent parcels.


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SalesPhoenix Industrial

SALES VOLUME & MARKET SALE PRICE PER SF


Page 15

Sales Past 12 MonthsPhoenix Industrial

858 6.8% $105 11.6%Sale Comparables Avg. Cap Rate Avg. Price/SF Avg. Vacancy At Sale

SALE COMPARABLE LOCATIONS

SALE COMPARABLES SUMMARY STATISTICS

Sales Attributes Low Average Median High

Sale Price $95,000 $4,893,899 $1,555,000 $136,040,593

Price Per SF $2.82 $105 $109 $648

Cap Rate 4.4% 6.8% 6.9% 11.4%

Time Since Sale in Months 0.0 5.7 5.2 12.0

Property Attributes Low Average Median High

Building SF 841 39,679 13,264 1,267,110

Ceiling Height 8' 18' 16' 40'

Docks 0 6 0 255

Vacancy Rate At Sale 0% 11.6% 0% 100%

Year Built 1908 1986 1986 2019

Star Rating 2.2


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Sales Past 12 MonthsPhoenix Industrial

Property Name - Address Rating Yr Built Bldg SF Vacancy Price Price/SF

Property

Sale Date

Sale

Cap Rate

RECENT SIGNIFICANT SALES

-1 Riverside Ind. Center - II…2008 1,207,021 0% $136,040,593 $113

4750-5050 W Mohave St10/4/2019 -

-1 Riverside Ind. Center - II…2008 1,207,021 0% $129,425,350 $107

4750-5050 W Mohave St9/26/2019 -

-2 Bldg 22009 1,267,110 0% $127,123,394 $100

800 N 75th Ave9/26/2019 -

-3 Enterprise Data Center1988 191,000 0% $72,750,000 $381

2500 W Frye Rd7/25/2019 -

-4 Lincoln 40 Logistics2018 901,700 0% $69,832,600 $77

575 S 143rd Ave8/19/2019 -

-5 Chewy Distribution2018 800,000 0% $67,002,500 $84

255 S 143rd Ave11/26/2019 -

-6 Hensley & Co1988 267,606 0% $57,681,920 $216

4201 N 45th Ave8/29/2019 -

-7 Bldg 181984 223,944 72.1% $51,012,083 $228

107 S 41st Ave9/26/2019 -

-8 43rd Avenue Logistics C…2013 394,775 100% $47,400,000 $120

1635 S 43rd Ave9/24/2019 -

-9 7037 W Van Buren St2004 552,330 0% $45,910,370 $838/9/2019 -

-10 Cactus Distribution Cent…2007 376,760 100% $40,398,879 $107

4747 W Buckeye Rd9/26/2019 -

-11 3333 S 7th St2016 393,484 48.5% $38,750,000 $9811/26/2019 -

-12 Phase II - Bldg 12008 380,569 0% $38,180,760 $100

6825 W Buckeye Rd9/26/2019 -

-13 Tolleson Logistics Center2018 329,400 0% $34,650,000 $105

200 N 99th Ave7/29/2019 4.9%

-14 Hensley & Company2007 230,826 0% $32,507,451 $141

2555 N Nevada St8/29/2019 -

-15 Palo Verde Distribution…1994 304,668 0% $30,565,957 $100

9704 W Roosevelt St9/26/2019 -

-16 Phase II - Bldg 22008 303,495 0% $30,448,276 $100

6913 W Buckeye Rd9/26/2019 -

-17 8681 W Washington St2018 118,123 0% $29,830,000 $2534/12/2019 -

-10 Cactus Distribution Cent…2007 376,760 100% $29,715,114 $79

4747 W Buckeye Rd10/4/2019 -

-18 Royal Paper Converting2006 319,860 0% $29,500,000 $92

2060 S 51st Ave7/15/2019 6.1%


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EconomyPhoenix Industrial

Population growth, a large and growing labor pool, thediversifying economy, an attractive cost of living anddoing business, and a business-friendly regulatoryenvironment have strengthened the Phoenix valueproposition. These characteristics are attracting newresidents and businesses to the region, making Phoenixone of the most dynamic metros in the country. Phoenixis the 11th-largest metro and the second-fastest-growing MSA in the nation, adding more than 96,000residents in 2018. During the same period, metroPhoenix ranked second for net migration, attracting72,900 new people, for an average of 200 people movingto Phoenix daily. Despite its reputation as a retirementcommunity, the median age in Phoenix is 36 years,below the U.S. median of 38 years. The millennial agegroup (20–34-year-olds) accounts for the largest shareof the metro’s population, making Phoenix attractive tocompanies searching for a vibrant and young workforce.

Net migration and the presence of large educationalinstitutions and colleges are growing the local labor pool.Metro Phoenix is home to the largest public and privateuniversities in the country: Arizona State University(ASU) and Grand Canyon University (GCU). ASUenrollment surpassed 111,000 students in fall 2018,spread across five campuses and the ASU SkysongInnovation Center. ASU’s main campus in Tempe is thelargest, with more than 51,500 students, serving as asubstantial economic driver. Meanwhile, Grand CanyonUniversity’s presence in the West Valley has grownconsiderably over the past decade, contributing tosignificant transformative growth in that part of the metro.GCU enrollment swelled from 1,000 students in 2008 tomore than 20,000 students on campus, and totalenrollment (which includes online students) exceeds98,000 students today. Beyond producing newgraduates, these universities are also prominentemployers in the metro.

Thanks to the large and growing labor pool, businessesare flocking to Phoenix. Companies looking to scaleknow that their current and future labor needs will be metwith the outsized existing workforce and growing talentpipeline. While labor is the primary driver behind themarket’s business attraction efforts, Phoenix’s relativeaffordability compared to coastal cities and metros of itssize lures relocating and expanding businesses. Recentjob announcements by Intel, Allstate, Deloitte, Mayo

Clinic, Nikola Motor Company, Fox Corporation, WellsFargo, Infosys, and USAA have contributed to thousandsof high-quality jobs and are bolstering the quality of lifein the metro.

While the number of companies expanding to metroPhoenix is noteworthy, the diversity of industries isnecessary in sustaining the region’s long-term viability.Diversification of the local economy is shifting Phoenixaway from its “boom-and-bust” tendency towards amore sustainable economy.

The Phoenix economy has transformed over the past 10years. Whereas the local economy was dependent onindustries associated with householdgrowth—construction, lending, brokerage, etc.—today,growth is more prominent in healthcare, professional andbusiness services, and financial activities. Because of themetro’s past reliance on housing, Phoenix was amongthe hardest-hit markets during the recession; the marketlost more than 300,000 jobs, 25% of which were in theconstruction industry alone.

Today, Phoenix is leading the nation in job growth. Themarket has become a hub for financial services. StateFarm selected Tempe for its 2.1-million-SF campus in2015, which is expected to house up to 8,000employees. Following State Farm's lead, insurance andfinancial services companies have increased theirfootprints across the Valley, including sizable expansionsby Farmers, Voya, Allstate, Freedom Financial, Bank ofthe West, and Nationwide.

Phoenix is also gaining recognition as a growingtechnology center. Microsoft, Google, and Apple have allinvested in building data centers in various parts of themetro. Additionally, Amazon, Indeed, ZipRecruiter, Uber,Waymo, Offerpad, and Houzz have also relocated andexpanded, adding high-quality jobs. These employersare particularly attracted to live/work/play submarkets inTempe, Chandler, Scottsdale, and downtown Phoenixthat help to attract quality talent. Many of thesecompanies are migrating from California and othercoastal markets, fleeing intense competition for talentand costly labor and real estate. A significant share ofthe metro’s tech jobs are with non-tech companies thathave established IT centers such as USAA, Deloitte,General Motors, and Charles Schwab.


Page 18


PHOENIX EMPLOYMENT BY INDUSTRY IN THOUSANDS

Industry Jobs LQ MarketUK UKMarketUKMarket

Current Jobs Current Growth 10 Yr Historical 5 Yr Forecast

-0.26%0.22%1.14%1.73%0.87%2.48%0.7132Manufacturing

0.32%1.05%1.31%1.89%0.58%2.15%1.0415Trade, Transportation and Utilities

0.24%1.38%0.95%1.50%-0.17%0.34%1.0235 Retail Trade

0.31%0.84%1.18%3.20%1.20%0.05%1.6196Financial Activities

0.66%0.90%0.05%0.09%0.63%0.83%0.7236Government

0.25%2.02%2.73%4.98%2.24%7.37%1.2146Natural Resources, Mining and Construction

0.62%1.54%2.14%3.97%2.43%4.10%1.0345Education and Health Services

0.87%1.37%2.73%3.32%2.00%2.68%1.2372Professional and Business Services

0.47%1.28%0.30%2.94%0.30%-0.20%0.939Information

0.59%0.77%2.63%3.18%1.95%-0.16%1.0233Leisure and Hospitality

0.21%0.81%1.14%0.67%1.59%0.73%0.872Other Services

Total Employment 2,187 1.0 2.21% 1.42% 2.60% 1.59% 1.13% 0.47%

Source: Oxford Economics

LQ = Location Quotient


YEAR OVER YEAR JOB GROWTH


Page 19


DEMOGRAPHIC TRENDS

Current ChangeCurrent Level

Metro U.S.Metro U.S.Demographic Category

10-Year Change

Metro U.S. Metro U.S.

Forecast Change (5 Yrs)

Population 330,049,3134,992,399 2.2% 0.7% 1.8% 0.7% 2.1% 0.7%

Households 121,480,2811,751,621 2.0% 0.5% 1.7% 0.6% 2.0% 0.6%

Median Household Income $65,701$67,372 4.4% 4.0% 2.5% 2.7% 3.7% 4.2%

Labor Force 163,892,8752,484,651 1.3% 0.6% 1.8% 0.7% 1.1% 0.5%

Unemployment 3.7%4.2% -0.1% -0.1% -0.6% -0.6% - -


POPULATION GROWTH


LABOR FORCE GROWTH INCOME GROWTH


Page 20

SubmarketsPhoenix Industrial

PHOENIX SUBMARKETS


Page 21


SUBMARKET INVENTORY

12 Month Deliveries Under Construction

Bldgs SF (000) Percent Rank

Inventory

Bldgs SF (000) Percent RankBldgs SF (000) % Market RankSubmarketNo.

1 Central Phoenix 4,577 1.3% 23 0 - - -362 1 59 1.3% 14

2 Chandler 22,407 6.4% 3 0 - - -379 6 1,108 4.9% 2

3 Chandler Airport 3,825 1.1% 27 8 837 21.9% 5101 2 20 0.5% 17

4 Chandler N/Gilbert 21,622 6.2% 4 10 1,200 5.6% 4802 14 1,136 5.3% 1

5 Deer Vly/Pinnacle Pk 17,640 5.0% 7 6 217 1.2% 9700 5 238 1.3% 11

6 Falcon Fld/Apache Jct 5,548 1.6% 21 2 134 2.4% 10266 8 269 4.8% 10

7 Glendale 10,891 3.1% 14 10 2,916 26.8% 2137 6 411 3.8% 8

8 Goodyear 13,333 3.8% 12 8 2,124 15.9% 3180 1 39 0.3% 15

9 Grand Avenue 13,492 3.8% 11 0 - - -634 0 0 0% -

10 Mesa 7,763 2.2% 17 1 20 0.3% 13483 0 0 0% -

11 North Airport 13,548 3.9% 10 4 471 3.5% 7632 0 0 0% -

12 North Black Canyon 4,562 1.3% 25 0 - - -256 1 80 1.8% 13

13 North Outlying 149 0% 29 0 - - -16 0 0 0% -

14 Northwest Outlying 39 0% 31 0 - - -3 0 0 0% -

15 Pinal County 9,769 2.8% 15 0 - - -394 1 5 0.1% 18

16 S Airport N of Roeser 15,548 4.4% 9 0 - - -516 3 115 0.7% 12

17 S Airport S of Roeser 4,562 1.3% 24 0 - - -167 0 0 0% -

18 SC N of Salt River 16,089 4.6% 8 0 - - -687 4 555 3.4% 6

19 SC S of Salt River 2,566 0.7% 28 0 - - -134 0 0 0% -

20 Scottsdale Airpark 6,803 1.9% 19 1 26 0.4% 12368 0 0 0% -

21 Scottsdale/Salt River 5,395 1.5% 22 3 38 0.7% 11169 0 0 0% -

22 Southwest Outlying 100 0% 30 0 - - -4 0 0 0% -

23 Surprise 4,152 1.2% 26 0 - - -158 3 449 10.8% 7

24 SW N of Buckeye Road 33,739 9.6% 2 3 552 1.6% 6729 3 888 2.6% 4

25 SW S of Buckeye Road 18,807 5.4% 6 2 348 1.8% 8315 4 768 4.1% 5

26 Tempe East 6,693 1.9% 20 0 - - -374 1 31 0.5% 16

27 Tempe Northwest 11,182 3.2% 13 0 - - -346 1 307 2.7% 9

28 Tempe Southwest 21,501 6.1% 5 0 - - -616 0 0 0% -

29 Tolleson 39,284 11.2% 1 16 3,037 7.7% 1249 5 1,051 2.7% 3

30 W Phx N of Thomas Rd 8,340 2.4% 16 0 - - -471 0 0 0% -

31 W Phx S of Thomas Rd 7,099 2.0% 18 0 - - -323 0 0 0% -


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SUBMARKET RENT

Growth

Market Rent

Per SFSubmarketNo.

12 Month Market Rent QTD Annualised Market Rent

RankRank GrowthRank

1 Central Phoenix 2.8%3 4.9% 25$12.05 21

2 Chandler 2.8%7 4.5% 29$10.16 25

3 Chandler Airport 4.2%10 6.6% 3$10.04 7

4 Chandler N/Gilbert 2.8%12 4.6% 28$9.66 26

5 Deer Vly/Pinnacle Pk 2.9%5 5.3% 17$11.03 20

6 Falcon Fld/Apache Jct 2.8%4 4.2% 30$11.04 23

7 Glendale 3.9%23 5.4% 13$7.34 10

8 Goodyear 4.3%31 5.8% 7$5.72 6

9 Grand Avenue 3.4%24 5.0% 24$7.07 13

10 Mesa 3.6%17 5.3% 18$8.98 11

11 North Airport 2.0%13 5.2% 20$9.42 31

12 North Black Canyon 2.3%9 7.5% 1$10.05 30

13 North Outlying 2.8%18 4.7% 27$8.95 22

14 Northwest Outlying 2.8%15 3.5% 31$9.20 24

15 Pinal County 4.0%22 4.9% 26$7.45 9

16 S Airport N of Roeser 3.0%16 5.5% 11$9.17 16

17 S Airport S of Roeser 3.5%14 5.3% 15$9.26 12

18 SC N of Salt River 4.4%20 6.0% 5$8.21 4

19 SC S of Salt River 10.9%21 6.7% 2$7.77 1

20 Scottsdale Airpark 3.0%2 5.4% 14$14.07 17

21 Scottsdale/Salt River 2.7%1 5.0% 23$14.20 27

22 Southwest Outlying 3.0%28 5.5% 12$6.38 18

23 Surprise 3.2%8 5.8% 8$10.13 15

24 SW N of Buckeye Road 4.5%30 5.9% 6$5.97 3

25 SW S of Buckeye Road 4.1%27 5.1% 22$6.68 8

26 Tempe East 2.7%6 5.2% 19$10.24 28

27 Tempe Northwest 2.6%11 5.3% 16$9.82 29

28 Tempe Southwest 3.0%19 5.6% 9$8.88 19

29 Tolleson 5.2%29 6.4% 4$6.01 2

30 W Phx N of Thomas Rd 3.2%26 5.1% 21$6.89 14

31 W Phx S of Thomas Rd 4.4%25 5.5% 10$6.90 5


Page 23

































SUBMARKET VACANCY & NET ABSORPTION

12 Month Net Absorption

Rank Construct. Ratio

Vacancy

SF % of InvSF PercentSubmarketNo. Rank

1 Central Phoenix 139,331 3.0% 0.781,434 1.8% 164

2 Chandler 1,576,239 7.0% 2.2481,443 2.1% 821

3 Chandler Airport 203,456 5.3% 0456,329 11.9% 914

4 Chandler N/Gilbert 1,339,630 6.2% 1.6727,193 3.4% 418

5 Deer Vly/Pinnacle Pk 1,062,846 6.0% 0.4550,489 3.1% 517

6 Falcon Fld/Apache Jct 540,896 9.7% 1.7157,341 2.8% 1324

7 Glendale 1,137,437 10.4% -(206,392) -1.9% 3026

8 Goodyear 410,181 3.1% -1,333,407 10.0% 15

9 Grand Avenue 375,192 2.8% -(13,994) -0.1% 252

10 Mesa 316,107 4.1% -5,349 0.1% 2010

11 North Airport 607,901 4.5% -17,213 0.1% 1912

12 North Black Canyon 327,465 7.2% 0.6131,137 2.9% 1422

13 North Outlying - - -0 0% --

14 Northwest Outlying - - -0 0% --

15 Pinal County 419,012 4.3% -(12,738) -0.1% 2411

16 S Airport N of Roeser 1,028,584 6.6% 0.2505,359 3.3% 720

17 S Airport S of Roeser 207,330 4.5% -(55,097) -1.2% 2813

18 SC N of Salt River 892,617 5.5% 2.0284,138 1.8% 1116

19 SC S of Salt River 194,010 7.6% -216,562 8.4% 1223

20 Scottsdale Airpark 427,923 6.3% -(15,701) -0.2% 2619

21 Scottsdale/Salt River 126,728 2.3% -20,292 0.4% 181

22 Southwest Outlying - - -1,435 1.4% 21-

23 Surprise 134,433 3.2% 1.3358,101 8.6% 107

24 SW N of Buckeye Road 1,818,516 5.4% 0.8826,710 2.5% 315

25 SW S of Buckeye Road 2,343,017 12.5% -(955,062) -5.1% 3127

26 Tempe East 240,252 3.6% 0.484,278 1.3% 158

27 Tempe Northwest 415,747 3.7% 0.5531,766 4.8% 69

28 Tempe Southwest 2,108,093 9.8% -41,218 0.2% 1725

29 Tolleson 5,007,738 12.7% 1.0994,918 2.5% 228

30 W Phx N of Thomas Rd 268,491 3.2% -(26,007) -0.3% 276

31 W Phx S of Thomas Rd 207,408 2.9% -(113,470) -1.6% 293


Page 24
































Supply & Demand TrendsPhoenix Industrial

OVERALL SUPPLY & DEMAND

Net AbsorptionInventory

% of Inv Construction RatioSF SF Growth % Growth SFYear

2023 7,387,620 1.9% 1.4%5,315,351 1.4386,921,438

2022 8,080,938 2.2% 1.5%5,777,883 1.4379,533,818

2021 8,149,548 2.2% 1.6%6,093,749 1.3371,452,880

2020 12,312,295 3.5% 1.8%6,619,566 1.9363,303,332

2019 6,972,853 2.0% 2.2%7,597,782 0.9350,991,037

YTD 7,003,011 2.0% 1.8%6,287,334 1.1351,021,195

2018 8,001,325 2.4% 2.5%8,482,700 0.9344,018,184

2017 6,708,331 2.0% 3.3%11,143,805 0.6336,016,859

2016 3,536,823 1.1% 1.8%5,862,860 0.6329,308,528

2015 4,997,040 1.6% 2.5%8,157,696 0.6325,771,705

2014 6,515,971 2.1% 3.1%9,815,096 0.7320,774,665

2013 5,598,845 1.8% 1.3%3,985,230 1.4314,258,694

2012 2,679,073 0.9% 2.1%6,563,044 0.4308,659,849

2011 285,747 0.1% 2.2%6,762,468 0305,980,776

2010 1,327,941 0.4% 1.5%4,597,325 0.3305,695,029

2009 3,569,224 1.2% -1.7%(5,324,072) -304,367,088

2008 12,394,807 4.3% -0.4%(1,147,249) -300,797,864

2007 13,096,471 4.8% 2.4%6,897,985 1.9288,403,057

SPECIALISED INDUSTRIAL SUPPLY & DEMAND



2023 1,379,129 1.5% 1.0%905,150 1.591,931,070

2022 1,508,578 1.7% 1.2%1,044,435 1.490,551,941

2021 2,090,768 2.4% 1.5%1,304,823 1.689,043,363

2020 2,386,175 2.8% 0.9%762,588 3.186,952,595

2019 1,254,617 1.5% 0.7%560,241 2.284,566,420

YTD 1,284,775 1.5% 0.7%602,156 2.184,596,578

2018 724,756 0.9% 1.7%1,456,524 0.583,311,803

2017 1,029,559 1.3% 3.2%2,632,141 0.482,587,047

2016 519,522 0.6% 1.1%912,822 0.681,557,488

2015 (275,813) -0.3% 1.2%983,721 -81,037,966

2014 3,119,749 4.0% 5.6%4,529,860 0.781,313,779

2013 318,652 0.4% 0.6%447,347 0.778,194,030

2012 1,565,363 2.1% 1.1%854,818 1.877,875,378

2011 772,643 1.0% 1.7%1,272,778 0.676,310,015

2010 360,903 0.5% 1.1%847,299 0.475,537,372

2009 71,521 0.1% -2.0%(1,480,635) -75,176,469

2008 1,115,135 1.5% -1.1%(803,435) -75,104,948

2007 1,557,659 2.2% 1.2%895,121 1.773,989,813


Page 25

Supply & Demand TrendsPhoenix Industrial

LOGISTICS SUPPLY & DEMAND



2023 5,742,113 2.3% 1.7%4,381,377 1.3260,061,544

2022 6,280,971 2.5% 1.9%4,721,501 1.3254,319,431

2021 5,790,288 2.4% 2.0%4,853,013 1.2248,038,460

2020 9,872,261 4.2% 2.4%5,891,507 1.7242,248,172

2019 4,847,273 2.1% 2.6%6,137,977 0.8232,375,911

YTD 4,847,273 2.1% 2.0%4,734,615 1.0232,375,911

2018 7,219,557 3.3% 2.8%6,392,331 1.1227,528,638

2017 5,614,519 2.6% 3.8%8,325,766 0.7220,309,081

2016 3,025,176 1.4% 2.2%4,632,497 0.7214,694,562

2015 5,268,132 2.6% 2.9%6,179,103 0.9211,669,386

2014 3,308,109 1.6% 2.2%4,467,525 0.7206,401,254

2013 5,031,706 2.5% 1.7%3,403,784 1.5203,093,145

2012 1,071,140 0.5% 2.5%5,036,801 0.2198,061,439

2011 (48,877) 0% 2.7%5,369,775 -196,990,299

2010 862,795 0.4% 1.8%3,606,573 0.2197,039,176

2009 2,990,931 1.5% -1.7%(3,356,166) -196,176,381

2008 10,498,675 5.7% -0.1%(96,954) -193,185,450

2007 11,136,798 6.5% 3.3%5,970,257 1.9182,686,775

LIGHT INDUSTRIAL SUPPLY & DEMAND



2023 266,378 0.8% 0.1%28,824 9.234,928,824

2022 291,389 0.8% 0%11,947 24.434,662,446

2021 268,492 0.8% -0.2%(64,087) -34,371,057

2020 53,859 0.2% -0.1%(34,529) -34,102,565

2019 870,963 2.6% 2.6%899,564 1.034,048,706

YTD 870,963 2.6% 2.8%950,563 0.934,048,706

2018 57,012 0.2% 1.9%633,845 0.133,177,743

2017 64,253 0.2% 0.6%185,898 0.333,120,731

2016 (7,875) 0% 1.0%317,541 -33,056,478

2015 4,721 0% 3.0%994,872 033,064,353

2014 88,113 0.3% 2.5%817,711 0.133,059,632

2013 248,487 0.8% 0.4%134,099 1.932,971,519

2012 42,570 0.1% 2.1%671,425 0.132,723,032

2011 (438,019) -1.3% 0.4%119,915 -32,680,462

2010 104,243 0.3% 0.4%143,453 0.733,118,481

2009 506,772 1.6% -1.5%(487,271) -33,014,238

2008 780,997 2.5% -0.8%(246,860) -32,507,466

2007 402,014 1.3% 0.1%32,607 12.331,726,469


Page 26

Rent & VacancyPhoenix Industrial

OVERALL RENT & VACANCY

Market Rent

Per SF Index % Growth Vs Hist PeakYear

Vacancy

SF Percent Ppts Chg

2023 126 0.6% 15.8%$9.18 34,612,292 8.9% 0.4%

2022 125 1.5% 15.1%$9.13 32,534,182 8.6% 0.4%

2021 123 2.8% 13.4%$9.00 30,221,576 8.1% 0.4%

2020 120 4.7% 10.4%$8.76 28,151,392 7.7% 1.4%

2019 115 5.5% 5.5%$8.37 22,451,875 6.4% -0.4%

YTD 115 5.3% 5.3%$8.35 23,876,580 6.8% 0.1%

2018 109 5.7% 0%$7.93 23,227,154 6.8% -0.3%

2017 103 4.7% -5.4%$7.50 23,708,529 7.1% -1.5%

2016 98 4.9% -9.6%$7.17 28,148,359 8.5% -0.8%

2015 94 4.5% -13.8%$6.84 30,474,939 9.4% -1.1%

2014 90 4.9% -17.5%$6.54 33,635,595 10.5% -1.3%

2013 85 3.2% -21.4%$6.23 36,934,720 11.8% 0.3%

2012 83 1.6% -23.8%$6.04 35,321,105 11.4% -1.4%

2011 81 -2.9% -25.1%$5.94 39,205,076 12.8% -2.1%

2010 84 -7.3% -22.9%$6.12 45,681,797 14.9% -1.1%

2009 90 -9.5% -16.8%$6.60 48,960,686 16.1% 2.8%

2008 100 -3.3% -8.1%$7.29 40,067,390 13.3% 4.1%

2007 103 4.1% -4.9%$7.54 26,538,025 9.2% 1.8%

SPECIALISED INDUSTRIAL RENT & VACANCY

Market Rent


Vacancy

SF Percent Ppts Chg

2023 116 0.6% 11.3%$8.96 6,236,149 6.8% 0.4%

2022 115 1.4% 10.6%$8.91 5,761,627 6.4% 0.4%

2021 114 2.3% 9.1%$8.78 5,296,177 5.9% 0.8%

2020 111 3.4% 6.6%$8.58 4,508,017 5.2% 1.8%

2019 107 3.1% 3.1%$8.30 2,883,114 3.4% 0.8%

YTD 107 3.0% 3.0%$8.29 2,841,199 3.4% 0.8%

2018 104 3.6% 0%$8.05 2,156,295 2.6% -0.9%

2017 101 5.0% -3.4%$7.78 2,899,063 3.5% -2.0%

2016 96 5.0% -8.0%$7.41 4,501,645 5.5% -0.5%

2015 91 4.0% -12.4%$7.06 4,894,945 6.0% -1.5%

2014 88 4.0% -15.8%$6.79 6,154,479 7.6% -2.1%

2013 84 2.6% -19.0%$6.53 7,564,590 9.7% -0.2%

2012 82 2.2% -21.0%$6.36 7,693,285 9.9% 0.7%

2011 80 -3.4% -22.7%$6.22 6,982,740 9.2% -0.8%

2010 83 -7.8% -20.0%$6.44 7,482,875 9.9% -0.7%

2009 90 -9.6% -13.2%$6.99 7,969,271 10.6% 2.1%

2008 100 -3.5% -4.0%$7.73 6,417,115 8.5% 2.4%

2007 104 5.7% -0.6%$8.01 4,511,709 6.1% 0.8%


Page 27

Rent & VacancyPhoenix Industrial

LOGISTICS RENT & VACANCY

Market Rent


Vacancy

SF Percent Ppts Chg

2023 130 0.6% 17.1%$8.45 24,641,672 9.5% 0.3%

2022 129 1.5% 16.4%$8.40 23,275,503 9.2% 0.4%

2021 128 2.9% 14.7%$8.28 21,708,082 8.8% 0.2%

2020 124 5.0% 11.5%$8.05 20,759,451 8.6% 1.4%

2019 118 6.2% 6.2%$7.67 16,773,691 7.2% -0.8%

YTD 118 6.0% 6.0%$7.65 18,270,599 7.9% -0.1%

2018 111 6.8% 0%$7.22 18,226,477 8.0% 0.1%

2017 104 4.6% -6.4%$6.76 17,388,251 7.9% -1.5%

2016 99 4.9% -10.5%$6.46 20,103,854 9.4% -0.9%

2015 95 5.2% -14.7%$6.16 21,711,718 10.3% -0.7%

2014 90 5.2% -18.9%$5.85 22,622,689 11.0% -0.7%

2013 86 3.3% -22.9%$5.56 23,782,105 11.7% 0.5%

2012 83 1.7% -25.4%$5.39 22,154,183 11.2% -2.1%

2011 82 -2.5% -26.6%$5.29 26,119,844 13.3% -2.7%

2010 84 -7.0% -24.7%$5.43 31,538,496 16.0% -1.5%

2009 90 -10.0% -19.1%$5.84 34,291,779 17.5% 3.0%

2008 100 -3.4% -10.0%$6.49 27,944,682 14.5% 5.0%

2007 104 3.6% -6.9%$6.72 17,348,580 9.5% 2.4%

LIGHT INDUSTRIAL RENT & VACANCY

Market Rent


Vacancy

SF Percent Ppts Chg

2023 126 0.6% 17.9%$14.94 3,734,471 10.7% 0.6%

2022 126 1.6% 17.1%$14.85 3,497,052 10.1% 0.7%

2021 124 3.0% 15.3%$14.62 3,217,317 9.4% 0.9%

2020 120 5.3% 12.0%$14.19 2,883,924 8.5% 0.2%

2019 114 6.4% 6.4%$13.48 2,795,070 8.2% -0.4%

YTD 114 6.2% 6.2%$13.46 2,764,782 8.1% -0.5%

2018 107 4.9% 0%$12.67 2,844,382 8.6% -1.8%

2017 102 4.3% -4.6%$12.08 3,421,215 10.3% -0.4%

2016 98 4.3% -8.6%$11.59 3,542,860 10.7% -1.0%

2015 94 3.0% -12.4%$11.11 3,868,276 11.7% -3.0%

2014 91 5.4% -14.9%$10.79 4,858,427 14.7% -2.3%

2013 87 3.9% -19.3%$10.23 5,588,025 16.9% 0.2%

2012 83 0.2% -22.3%$9.85 5,473,637 16.7% -1.9%

2011 83 -3.1% -22.5%$9.82 6,102,492 18.7% -1.4%

2010 86 -7.5% -20.0%$10.14 6,660,426 20.1% -0.2%

2009 93 -7.3% -13.6%$10.96 6,699,636 20.3% 2.7%

2008 100 -2.4% -6.7%$11.82 5,705,593 17.6% 2.8%

2007 102 3.5% -4.4%$12.11 4,677,736 14.7% 1.0%


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Sale TrendsPhoenix Industrial

OVERALL SALES

Completed Transactions (1)

Turnover Avg Price/SFDeals VolumeYear

Market Pricing Trends (2)

Avg Price Price IndexAvg Yield Price/SF Yield

2023 -- - -- 178- $123.48 6.5%

2022 -- - -- 175- $121.49 6.4%

2021 -- - -- 173- $120.01 6.3%

2020 -- - -- 166- $115.19 6.3%

2019 -- - -- 155- $107.48 6.4%

YTD $2,867 M822 8.3% $105.13$4,958,864 1556.8% $107.33 6.4%

2018 $2,079 M932 7.8% $98.27$3,420,592 1426.5% $98.41 6.5%

2017 $1,334 M793 5.6% $83.86$2,505,024 1327.0% $91.26 6.6%

2016 $1,666 M732 7.5% $72.19$3,184,262 1236.7% $85.41 6.7%

2015 $1,295 M794 7.9% $76.07$2,497,272 1146.6% $79.03 6.8%

2014 $1,267 M753 5.8% $73.85$2,245,297 1037.2% $71.76 7.2%

2013 $1,155 M660 5.6% $70.39$2,444,572 947.6% $65.19 7.5%

2012 $995.0 M598 6.3% $60.10$2,146,228 897.7% $61.88 7.6%

2011 $611.3 M541 4.4% $51.97$1,584,558 868.9% $59.78 7.9%

2010 $638.0 M439 3.4% $71.63$2,051,977 859.1% $58.91 8.0%

2009 $355.3 M237 1.9% $62.96$1,862,612 868.2% $59.80 8.1%

2008 $1,089 M436 4.4% $84.46$3,228,525 1007.3% $69.36 7.5%

(1) Completed transaction data is based on actual arms-length sales transactions and levels are dependent on the mix of what happened to sell in the period.

(2) Market price trends data is based on the estimated price movement of all properties in the market, informed by actual transactions that have occurred.

SPECIALISED INDUSTRIAL SALES





2023 -- - -- 175- $115.55 6.5%

2022 -- - -- 172- $113.63 6.4%

2021 -- - -- 170- $112.37 6.3%

2020 -- - -- 164- $108.35 6.3%

2019 -- - -- 155- $102.42 6.4%

YTD $413.6 M174 5.4% $100.35$3,280,877 1556.8% $102.32 6.4%

2018 $300.8 M193 5.3% $92.94$2,467,264 1417.1% $93.13 6.5%

2017 $239.6 M184 4.6% $79.41$1,840,965 1317.2% $86.64 6.6%

2016 $243.4 M157 4.8% $67.20$2,032,655 1237.5% $81.19 6.7%

2015 $290.7 M175 6.1% $72.20$2,381,437 1146.7% $75.17 6.9%

2014 $204.1 M171 3.8% $72.48$1,689,886 1037.8% $68.05 7.2%

2013 $242.9 M125 5.3% $59.49$2,422,880 938.3% $61.66 7.5%

2012 $236.5 M140 5.5% $60.47$2,006,500 898.4% $58.79 7.7%

2011 $97.4 M106 3.0% $44.50$1,171,183 8610.1% $56.76 7.9%

2010 $88.0 M111 3.1% $52.02$1,120,172 8511.2% $56.09 8.0%

2009 $44.7 M42 0.9% $67.14$1,248,898 868.4% $56.92 8.1%

2008 $152.1 M82 2.3% $91.33$2,442,209 1007.2% $66.02 7.5%




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Sale TrendsPhoenix Industrial

LOGISTICS SALES





2023 -- - -- 180- $118.99 6.5%

2022 -- - -- 177- $117.10 6.4%

2021 -- - -- 175- $115.65 6.3%

2020 -- - -- 168- $110.86 6.3%

2019 -- - -- 156- $103.09 6.4%

YTD $2,126 M548 9.6% $100.94$5,544,846 1566.8% $102.94 6.4%

2018 $1,303 M628 8.4% $87.85$3,204,969 1436.2% $94.72 6.5%

2017 $793.7 M480 5.5% $77.37$2,527,008 1326.9% $87.40 6.6%

2016 $1,155 M466 8.4% $68.61$3,666,010 1246.5% $81.81 6.6%

2015 $748.3 M535 8.7% $69.50$2,206,496 1146.5% $75.61 6.8%

2014 $663.1 M450 5.6% $62.11$1,950,568 1047.4% $68.68 7.2%

2013 $562.5 M424 5.0% $61.68$1,896,277 947.3% $62.47 7.4%

2012 $639.5 M362 6.6% $58.55$2,230,809 907.5% $59.26 7.6%

2011 $410.7 M348 5.0% $49.88$1,621,635 868.1% $57.07 7.8%

2010 $300.2 M284 3.6% $48.52$1,431,792 858.6% $56.15 8.0%

2009 $252.0 M162 2.1% $62.88$1,876,585 868.3% $56.95 8.1%

2008 $767.3 M289 5.0% $81.26$3,315,514 1007.2% $66.14 7.5%



LIGHT INDUSTRIAL SALES





2023 -- - -- 174- $175.90 6.6%

2022 -- - -- 171- $173.03 6.5%

2021 -- - -- 169- $170.80 6.4%

2020 -- - -- 162- $163.58 6.4%

2019 -- - -- 150- $151.83 6.5%

YTD $327.6 M100 6.9% $156.79$4,768,792 1506.7% $151.57 6.5%

2018 $475.1 M111 10.7% $153.90$5,980,788 1377.1% $138.25 6.6%

2017 $301.0 M129 9.2% $114.21$3,447,004 1297.1% $130.64 6.6%

2016 $267.3 M109 8.4% $102.05$3,026,002 1216.8% $121.90 6.7%

2015 $255.5 M84 7.6% $114.88$4,512,624 1127.0% $113.28 6.8%

2014 $399.6 M132 11.3% $109.15$3,855,481 1026.6% $103.28 7.2%

2013 $349.4 M111 9.8% $109.11$4,637,130 937.9% $93.70 7.5%

2012 $118.9 M96 6.3% $69.08$2,008,263 887.7% $88.51 7.7%

2011 $103.2 M87 4.3% $77.06$2,112,561 8610.1% $86.84 7.8%

2010 $249.8 M44 3.1% $243.02$10,209,598 859.5% $85.89 7.9%

2009 $58.5 M33 3.0% $60.41$2,835,134 877.1% $87.58 8.0%

2008 $170.0 M65 5.5% $94.95$3,916,507 1007.5% $100.91 7.4%




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Phoenix - AZ · 2019. 12. 27. · the e-commerce, logistics, and construction industries. Phoenix...

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