MARKET SPOTLIGHT
Phoenix, Arizona
Chris Courneya
Managing Director
Phoenix has emerged as one of the nation's premier industrial investment markets, supported by exceptional population growth, a rapidly expanding advanced manufacturing ecosystem, and a strategic location that connects west coast ports, the U.S.-Mexico border, and major southwestern population centers. These factors continue to drive durable industrial demand and reinforce Phoenix's position as a key logistics and distribution hub.
Strong Population Growth and Advanced Manufacturing Momentum
Phoenix benefits from one of the strongest economic and demographic growth stories in the United States. Population growth, which has been roughly double the national pace, has been accompanied by significant corporate investment across advanced manufacturing, semiconductors, aerospace, defense, and data center development.
The market has become a focal point for domestic manufacturing reshoring efforts, highlighted by major semiconductor investments totaling more than $214 billion since 2020 and by the expansion of supplier networks throughout the region. The combination of population growth, job creation, and capital investment aligns closely with Founders’ market selection criteria, which prioritize high-growth MSAs with favorable business climates, expanding labor pools, and long-term economic diversification.
Strategic Southwest Logistics Hub
Phoenix occupies a strategic position within the southwestern logistics network, benefiting from direct access to the ports of Los Angeles and Long Beach, proximity to the U.S.-Mexico border, and connectivity through key transportation corridors including Interstates 10 and 17, rail networks, and expanding air cargo infrastructure. These advantages enable efficient goods movement across the western United States, making Phoenix an increasingly important distribution and manufacturing hub for companies seeking supply chain resiliency, faster delivery times, and access to growing western population centers.
Durable Industrial Fundamentals
Phoenix's industrial market fundamentals remain attractive despite heightened institutional interest and recent waves of new development. In the 12-month period ending Q2 2026 Phoenix experienced 19.6M SF of positive net absorption and a 260 bps decrease in vacancy as leasing velocity continues to outpace new deliveries. Demand has remained concentrated among logistics, manufacturing, and distribution users, with smaller-format industrial assets generally outperforming larger bulk facilities.
Conclusion
Phoenix’s industrial market is maturing, making asset selection critical. While large speculative facilities continue to absorb excess supply, infill and multi-tenant buildings under 300,000 SF are well positioned to outperform, supported by constrained supply and strong demand from advanced manufacturing and semiconductor users.
Sources: Cushman & Wakefield, CBRE, Matthews, Semiconductor Industry Association, Business Facilities, Lightcast