Here’s How the Valley’s Industrial Sector Changed in 2023

Article originally posted on Phoenix Business Journal on December 19, 2023

The Valley’s leasing needs evolved during 2023, in what was a transitional year for the sector.

Demand for the largest warehouses slowed significantly, but leasing for smaller spaces was still strong across the Valley in 2023 — and is expected to continue into next year. Meanwhile, industrial vacancies jumped in the second half of the year as a large number of buildings were delivered that had previously been held up by supply chain challenges or weather delays.

Experts say the most recently reported vacancy rate of 6.2% is closer to normal levels of supply and demand for the Valley’s industrial market, but this could drop back down as prospective tenants lease the new buildings going into 2024 and as fewer buildings start construction in the face of tumult in the capital markets.

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