With a total of over 52 million square feet of industrial space under development, Phoenix ranks 2nd among the largest U.S. markets by industrial real estate currently under construction, according to CommercialSearch’s latest study that analyzes the state of industrial real estate development in 2023.
Out of the projects to be delivered this year, Phoenix’s Lucid AMP – Phase 2 property stands out as the country’s 7th largest industrial development project due for completion in 2023.
Industrial real estate development continues to see sustained growth despite concerns of potential supply saturation. According to commercial real estate research platform CommercialEdge, more than 690 million square feet of industrial supply is under construction nationally. That’s up from last year’s previous all-time high of 592 million square feet, so industrial development is still accelerating with positive indicators such as higher last-year leases compared to in-place leases as well as record low vacancies.
This outlook highlights the potential of another strong year for industrial development, even if demand starts to normalize due to economic headwinds. So, to identify the markets experiencing the most demand and supply, we ranked all industrial markets based on square footage currently under construction. For further context, we also identified which industrial real estate subtypes generated the most new developments, as well as the largest properties scheduled to be completed this year.
- Dallas has the most industrial space in the pipeline for the third year in a row with 61.6 million square feet under construction.
- The 52.5 million square feet of industrial space under construction in Phoenix represents more than 15% of the market’s current stock.
- Amazon’s Project Schooner warehouse in Johnston, R.I., is the largest projected development this year, totaling 3.86 million square feet.
- Last year’s largest completion was Giga Texas, a 4.3-million-square-foot EV manufacturing facility.
145MSF of Industrial Space Under Construction in Dallas, Phoenix & Inland Empire
For the third year in a row, the high-demand Dallas market is poised to deliver the most industrial space nationally. Specifically, the 61.6 million square feet of space in the pipeline represents a 60% increase compared to last year’s 38 million, as well as a sizable 7.1% of the market’s current stock. Between logistics, manufacturing and specialized asset types, industrial development in the Metroplex is poised to keep chugging along for another year to meet the sustained demand.
At #2, Phoenix is expected to deliver around 52.5 million square feet of industrial space. This marks a further acceleration in the metro’s rapid industrial expansion as the new deliveries will supplement the Valley of the Sun’s industrial inventory by a whopping 15.3%. Furthermore, the city’s status as a regional logistics hub — in addition to spillover demand from southern California and the popularity of build-to-suit warehouses — means that the new supply is likely to be occupied with steadily climbing rents and vacancies around 3.2%.