The Greater Phoenix industrial market posted an impressive third quarter, making it one of the nation’s leading cities for the quarter, according to a report released by Colliers. Net absorption nearly tripled from the second quarter, totaling 7.87 million square feet. Vacancy continued to decline, falling 110 basis points quarter-over-quarter to 9.8 percent.Â
A decline in new supply of industrial space, combined with healthy leasing activity, drove the market to record two consecutive quarters of vacancy reduction – the first such improvement since third quarter 2022. Both direct and sublease vacancies fell during third quarter, reflecting sustained leasing demand. Sublease availability ended the quarter at 7.65 million square feet, or 1.7 percent of total inventory. All submarket clusters, except the Airport Area, posted quarter-over-quarter vacancy declines.
Combined with steady in-migration, strong employment growth, and a diversified industrial base, these factors are expected to keep Phoenix among the nation’s most dynamic industrial markets heading into 2026.
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