Phoenix, AZ Industrial Market Report Q3 2026

Vacancy Falls to 10.5% as Demand Outpaces New Supply 1.4x

Demand

Phoenix absorbed 5.19M SF in Q3 2026, against 6.12M SF in the same quarter last year. Vacancy is 10.5%, 166 bps tighter than Q3 2025. Northwest Outlying is the tightest submarket at 0.0% vacancy; Mesa/Apache Junction leads rent growth at +4.3%. Trailing-12-month absorption of 22.66M SF is up from 16.21M SF a year earlier. Asking rent of $13.27/SF is up 3.5% year over year and a record. Vacancy sits 205 bps below the Q1 2025 peak of 12.5%.

Supply

Phoenix delivered 5.88M SF in Q3 and 15.82M SF over the trailing twelve months (-37% versus the prior TTM period). Space under construction equals 4.1% of inventory, concentrated in Goodyear at 11.8% of its stock. Annual deliveries peaked at 39.00M SF in 2024. The 21.78M SF pipeline equals about four quarters of absorption at the trailing pace.

Investment Market

Phoenix recorded $5.3B in sales over the trailing twelve months, -5% against the prior TTM period; Q3 accounted for $1.50B. The high-water mark in this series is $6.7B in 2021.

Phoenix cap rates average 6.25%, down for 6 straight quarters. Pricing sits at $203/SF, higher for 15 consecutive years. The cap rate is 64 bps below the Q1 2015 high of 6.88%. Price per SF is at a record.