Phoenix's largest industrial buildings have flipped the script. Once challenged by elevated vacancy in the wake of a record-setting post-pandemic development cycle, the bulk warehouse segment is now evolving into one of the tightest product types in the market. With new deliveries slowing significantly and tenant demand continuing to outpace available supply, occupiers are competing for a shrinking pool of high-quality options, supporting the case for a new generation of large-format industrial development.
Five Quick Takeaways:
- Vacancy Has Plummeted: Direct vacancy for warehouses larger than 300,000 sf fell from 32.5% in 2022 to just 5.8% as of Q2 2026, making it now one of the tightest segments in the Phoenix industrial market.
- New Supply is Drying Up: Bulk warehouse deliveries have slowed significantly, with only 300,000 sf delivered through June 2026, down from more than 19 msf in 2023.
- Demand Remains Robust: Industrial users have committed to an average of 11.2 msf annually since 2021, led by 3PL, manufacturing, and retail occupiers.
- Requirements Outpace Availabilities: Currently, 34 active tenants in the market, totaling 21.5 msf, are pursuing just 4.1 msf of available bulk warehouse space.
- New Development is Needed: Nearly 80% of the active construction pipeline is already preleased, limiting potential options for occupiers supporting the case for additional large-format warehouse construction.
