Metro Phoenix posts strongest quarter of industrial investment on record Article originally posted on AZ Big Media on April 21, 2026 The Greater Phoenix industrial market posted its strongest quarter on record for industrial property investment sales, according to a report released by Colliers. Net absorption during first quarter was more than three and a half times the 1.38 million square feet of new supply delivered during the period, pushing vacancy down to 9.2 percent. Investment activity posted its strongest quarter on record with $990.8 million in total sales volume, highlighting Phoenix’ position as the country’s top industrial market. This marks a 24.0% increase year-over-year. The average price paid rose to $245.48 per square foot, up 17.4% from first quarter 2025. First quarter brought a total of 61 transactions with the Northwest cluster dominating. Prologis acquired Cotton 303 Logistics Center for $104 million. Transwestern purchased a two-building portfolio in Tolleson for $94.1 million. These transactions reflect institutional confidence in the Phoenix industrial market. All five of the quarter’s top transactions involved Class A buildings constructed within the past four years. Net absorption reached 4.81 million square feet in 2026, which is the strongest quarter since first quarter 2023. Net absorption exceeded delivery of new supply for the second consecutive quarter, marking a rebalancing of the industrial market. Several large deals took place in the West Valley. AWS signed a lease for 1.21 million square feet at Southern Industrial Center in Goodyear. DHL leased more than 1.6 million square feet in Glendale between two separate locations, Olive Logistics and Park 303. LG Energy Solution was the first tenant to lease space at CapRock West 202 Phase II, totaling 597,297 square feet, bringing the entire 3.3 million square feet of the project to peak over 80 percent occupancy. These underscore the strong demand from logistics, e-commerce and industrial tenants seeking modern, big-box product in the West Valley. Vacancy fell for the fourth consecutive quarter, declining each quarter since peaking at 11.2 percent in first quarter 2025. This trend signals a sustained market recovery as tenant demand continues to outpace the moderated pace of new product deliveries. By building type, warehouse/distribution vacancy stood at 10.2 percent, manufacturing at 6.3 percent, and office/service at 4.6 percent. The construction pipeline is gaining momentum, with building activity rising to 14.3 million square feet in first quarter 2026. This marks a 35% increase in construction activity from fourth quarter 2025 when just 10.6 million square feet were underway. Yet current construction activity still falls well below the market high of 33 million square feet in 2024. New deliveries were at a cycle low during first quarter 2026, with just 1.38 million square feet delivered. Current construction is strong, but not so high to risk the oversupply conditions seen in 2023-2024.