Phoenix Has Decade of Strong Industrial Construction

by Mike Hunter

It’s been quite a fruitful year so far for industrial real estate in the United States, reports Yardi Matrix in its recent “Top 50 Cities for Industrial Construction in the Past Decade”. Citing the National Real Estate Investor, Yardi Matrix reports that total industrial sales are expected to exceed 2016 levels this year, marking the second-best volume in 10 years. Large portfolio deals are also making a comeback, and both national and foreign investors are betting big on the market, drawn in by record rent growth.

Demand is heavily fueled by the rise of e-commerce, with providers competing for the limited available space. Retail giant Amazon is on the lookout for a new, 8-million-square-foot headquarters to support its growing e-commerce business, pitting major cities against one another. Other players in this sector are likely to follow suit, looking for suitable industrial space for their distribution centers.

The rise of e-commerce and the need for strategically-placed distribution centers to meet growing customer demand are opening the door to a whole new era for industrial development in the U.S. Using its in-depth data, Yardi Matrix compiled a list of the top 50 cities for industrial development in the U.S., from 2007 to 2017.

Phoenix, with 22.2 million square feet, came in second only to Houston as the top city, which had 32.2 million square feet, and was followed closely by Forth Worth, at 17.5 million square feet. Inland Empire, with six cities in the top 10, is the nation’s top market for industrial development — 131.7 million square feet completed in the past 10 years.

Market-wise, Phoenix has added 43.5 million square feet of industrial space since 2007, 11 million square feet less than New Jersey in the same number of buildings, ranking 6th nationally.

The second city to add the largest amount of square feet in the market is Goodyear at number 25, boasting 5.3 million square feet of space delivered in just 10 buildings; it’s also expecting a 540,000-square-foot LEED-proposed addition in Goodyear Crossing Industrial Park by the end of the year. Tolleson and Mesa also made the top 50, at numbers 35 and 47, respectively.

Top 10 in Industrial Space Growth

The following markets added the largest amount of industrial space in the last 10 years.

# Market Total Sq. Ft. Properties
1 Inland Empire 131,712,325 307
2 Chicago 108,798,851 322
3 Dallas-Ft. Worth 100,933,885 267
4 Houston 63,036,050 254
5 New Jersey 54,979,443 137
6 Phoenix 43,588,036 138
7 Atlanta 37,894,734 96
8 Charleston 37,647,029 112
9 Los Angeles 20,875,257 101
10 Philadelphia 17,489,974 51

 

Datasource: Yardi Matrix

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