TSMC’s $165B Phoenix campus fuels industrial demand in Northwest Valley

Article originally posted on Phoenix Business Journal on April 24, 2025

As goes TSMC, so goes Phoenix’s industrial real estate market.

Suppliers continue to gravitate to the Valley, angling to position themselves in the orbit of TSMC’s ever-growing, $165 billion campus in North Phoenix.

And while more industrial supply is set to come online in north Phoenix in the years to come — the $7 billion Halo Vista master-planned community could bring millions of square feet on its own — for the time being, experts suggest that limited supply in the Northwest Valley industrial submarket is keeping lease rates high and vacancy rates low. The submarket, which includes the TSMC complex and the popular Deer Valley area, is one of Phoenix’s most desirable locales for industrial tenants.

The metro’s industrial vacancy rate climbed to 12.2% in the first quarter even as building deliveries dropped 37.1% year-over-year to 7.4 million square feet, according to a recent report from CBRE. But the Northwest Valley submarket saw its vacancy rate drop 40 basis points “as Deer Valley continues to draw attention caused by TSMC’s investment announcement,” the CBRE report found.

Overall, the under-construction pipeline in the Valley has slipped to 11.1 million square feet during the first quarter, which is the lowest total since the first quarter of 2021.

Despite the attention on Deer Valley, only 10% of the of the industrial space under construction in Phoenix — just shy of 1.1 million square feet — is situated in the Northwest Valley. Meanwhile, 80% of the industrial construction activity is situated in either the Southwest Valley or Southeast Valley, CBRE found.

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