The Southeast Valley houses the lion’s share of Q2 industrial activity
The Southeast Valley’s performance in the second quarter of 2019 has quickly made up for its hamstrung first quarter fundamentals
July 17, 2019
- The Southeast Valley’s performance in the second quarter of 2019 has quickly made up for its hamstrung first quarter fundamentals, as Safeway vacated just under 700,000 square feet of specialized cold-storage space. The second quarter was led by Z-Modular’s 222,000 square foot move-in, alongside others such as Sonny’s Car Wash (73,000 square feet) and Aramark (42,000 square feet). Quarter two is far ahead of the quarterly average absorption, locking in 1,534,831 square feet of absorption in a single quarter; the cluster as a whole has averaged 373,000 square feet of absorption in the last ten years.
- The combination of high skilled labor, prime proximity to three different airports, and the upcoming South Mountain Loop 202 freeway are amongst the many reasons tenants continue to migrate towards the Southeast Valley. When finished, the upcoming freeway extension will add viability to Southeast Valley warehousing options, as last mile delivery and westbound interstate travel become far more efficient.
- The Southeast Valley currently stands at a 6.3 percent vacancy rate, only twenty basis points above the historical low achieved in 2007. Tightening vacancy rates and a mixture of a strong pipeline of signed leases and significant tenants in the market will continue to see absorption outpace deliveries alongside rising rental rates.
Source: JLL Research