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Valley's Industrial Slumps with National Economy

PHOENIX-The metropolitan region is feeling a pinch from the sagging national economy, with industrial vacancy dipping by nearly a point. The 7.2% vacancy results from more than 1.8 million sf coming back on the market.

By D.J. Burrough | Updated on July 25, 2001

PHOENIX-Metropolitan Phoenix’s industrial vacancy rate has jumped nearly a full percentage point as more than 1.8 million sf of space comes back on the market, according to the latest survey by Grubb & Ellis Co.’s Phoenix office.

The metro’s rate is now riding at 7.2%, up from 6.3% at the start of the second quarter. During the quarter, the Valley experienced negative net absorption of 1.86 million sf. “I’m definitely seeing a slowdown in activity and absorption,” Pete Klees, an industrial broker with Grubb & Ellis, tells GlobeSt.com “It’s been slow all year, but was more accentuated in the second quarter.”

Companies are reticent to expand or open new industrial sites during a time when the national economy is in a fragile state. Most tenants plan to wait until there are signs that the economy has turned around before they consider leasing more space, Kleessays. “That’s what I’m hearing time and time again,” he says.

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