If it hadn't already, the Phoenix industrial market has officially hit its stride. Last year, industrial investment sales volumes doubled year-over-year to $1.8 billion, according to research from JLL. This year, Phoenix has been listed as a top buy market for industrial product, and it could mean another year of record-breaking deal volume. The investment demand has been driven by a host of strong fundamentals, including rent rate growth, tightening market supply and attractive geographic location within a day's drive of Los Angeles' two major ports.

“There are multiple fundamentals that have been driving the activity in the Southwest Valley,” Peter Bauman, SVP at JLL, tells GlobeSt.com. “First and foremost, industrial has become the darling of property types. Everyone wants to be in industrial, and there are a lot of investors and publicly traded REITs that are divesting away from other asset classes and doubling down on industrial product, so you have robust capital demand. Phoenix has positioned itself as being a leading big-box distribution center, and we have all of the right fundamentals, from workforce, infrastructure and freeways to meet those demands.”

While there is strong capital demand from the full spectrum of investment sources, from private to public REITs, Bauman says that the drivers of the industrial activity are investors that have been long active in the Phoenix market. “If you look at the top 10 buyers last year, they are all usual suspects, like Prologis, CBRE Global Investors and InvestCorp International,” he says. “We are also seeing investors divest from office and buying industrial properties.”