Industrial market shows early signs of recovery amid elevated vacancy
The Phoenix industrial market is showing early signs of recovery, supported by strengthening demand fundamentals. Net absorption increased to 5.0 million square feet (msf) in Q1 2026, up from 3.8 msf one year ago. As a result, vacancy declined 180 basis points (bps) year over year to 14.4%, although it is still elevated historically. The decrease in vacancy reflects improved leasing momentum, including Amazon’s 1.1-msf lease at 500 North 55th Avenue and DHL’s three leases totaling more than 1.6 msf across multiple facilities.