This year was significant for construction and delivery of industrial buildings across metro Phoenix.

After being held up by supply chain and labor challenges, as well as some weather delays, 16.5 million square feet of buildings were delivered in the third quarter of 2023, matching national trends.

Phoenix also ranked in the top of the nation for the most industrial space under construction, reaching nearly 60 million square feet being built at one point this year.

West Valley cities such as Glendale and Goodyear as well as Mesa in the East Valley saw the most construction activity in 2023, similar to the two previous years.

Experts say that construction starts slowed this year and could slow down in 2024 as well, which might bring the vacancy rate back down to low levels and create new demand for buildings by 2025.

Erik Powell, vice president at Stevens Leinweber Construction, said 2023 saw ongoing supply chain, labor and inflation challenges but said some pricing and availability of materials has started to ease.

“Supply chains have really leveled themselves out,” Powell said. “I don’t think we’re ever going to see pricing that we used to consider normal but we are heading in the right direction.”

Moving into 2024, more developers may look at building small to medium-sized warehouses to help meet demand for the majority of prospective tenants since leasing for the largest buildings has slowed.

Right now, Powell said he knows of a single 1 million-square-foot user looking for space in the Phoenix market despite about eight buildings that are 1 million square feet or more that are under construction or completed.

“That’s not a great sign,” he said. But now there will be enough supply to drive new users to Phoenix, Powell added. “The 250,000-square-foot and under tenant demand is off the charts.”

A look at the Valley’s top 10

Here are the top 10 projects delivered in metro Phoenix in 2023, according to data from CBRE Group Inc.:

1: CapRock Partners completed the 2.5 million-square-foot first phase of the West 202 Logistics industrial park near Interstate 10 and the Loop 202 in Phoenix. At full build-out the West 202 project is expected to total 3.4 million square feet.

2: Lincoln Property Co. delivered the second phase of its new Park303 project in Glendale along the Loop 303 near Glendale Avenue including three new buildings totaling 2.3 million square feet. Park303 will total 4 million square feet at build-out.

3: Creation Equity completed the first phase of the new Airpark Logistics Center in Goodyear with three buildings totaling 1.4 million square feet. The park, located at the Phoenix Goodyear Airport, will total 2.7 million square feet upon full build out.

4: The Cubes at Mesa Gateway with one building was delivered this year and totaled 1.2 million square feet. The facility was developed by CRG, an entity connected to Clayco, and fully leased to Lowe’s prior to completion.

5: A 1.2 million-square-foot industrial building called the Southern Industrial Center was delivered at Southern Avenue and Apache Road in Buckeye by Parklane Development Group and Miramar Industrial Partners.

6: A 1.2 million-square-foot building at the overall Cubes at Glendale project was completed by CRG. At full build-out, the industrial park will comprise 5.5 million square feet and house tenants including Williams-Sonoma, U.S. Merchants and more.

7: A large 1 million-square-foot building at 303 Crossroads was delivered after being fully pre-leased by sportswear brand Puma for a distribution center in Glendale. The 303 Crossroads will total 1.7 million square feet at full build-out.

8: Ryan Cos. completed the 906,105-square-foot warehouse called Hatcher Industrial Park with two buildings near Reems Road and Olive Avenue. The project also sold this year for $93 million to Westcore Properties.

9: A five-building project totaling 780,832 square feet called MET 202 completed at Elliot and Crimson roads in Mesa. It was developed by Eisenberg Co. and Manulife Investment Management and broke ground in 2022.

10: The first phase of Pursuit Park in Mesa was delivered with three buildings totaling nearly 640,000 square feet. A fourth building will be built as part of a second phase.

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