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Southwest submarket leads Phoenix’s industrial activity

• The Southwest submarket continues to be the life of industrial activity at the end of Q2, accounting for 35.5 percent of Phoenix’s absorption (39.8 percent of YTD absorption).

• The Southwest also leads the market in deliveries and square footage under construction, with 882,676 square feet delivered in Q2, and 3,765,480 square feet under construction. New speculative developments are expected to ease the growing demand in the Southwest, with total vacancy in the Southwest  down 20 basis points from last quarter to 7.4 percent.

• Although manufacturing only contributed to approximately 8 percent of the overall absorption, the market has potential to see large manufacturing growth in the coming years, with increased federal defense spending bringing in an additional $744 million in contracts granted to local entities. 

Source: JLL Research

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