Phoenix’s Industrial Pipeline Expands but Deliveries Slow

November 26, 2025

Market Updates Development In Focus Industrial More Investment Phoenix

The pace of development remains well above the national average, according to Yardi Matrix.

aerial image of The Meta Mesa Data Cente — The Meta Mesa Data Center is a $1 billion greenfield development featuring a five-building campus with more than 2.5 million square feet of data center and administrative space. *Image courtesy of DPR Construction*

Phoenix’s industrial market remained one of the most active in the nation through the third quarter, supported by steady development and solid investor interest. The metro continued to attract large-scale projects, with 17.2 million square feet underway—well above the national average—and construction levels more than doubling year-over-year.

Deliveries have slowed by the metro’s standard, but remained substantial with nearly 14 million square feet completed through September, keeping the metro among the top performers nationally. Investment activity held strong at $2.7 billion, as pricing stayed firm compared to other major logistics hubs. Vacancy inched up to 8.2 percent, while rents reflected consistent demand, according to Yardi Matrix.

Development pipeline expands as starts ease

Phoenix had 17.2 million square feet of industrial space under construction across 76 properties, accounting for 3.9 percent of total stock, higher than the 1.7 percent national average. The pipeline was larger than a year ago, when it totaled 7 million square feet.

Rendering of a building at West 101 Logistics Center — The largest building on the West 101 Logistics Center campus will total 311,853 square feet. *Rendering courtesy of Trammell Crow Co*.

Within the peer set, Atlanta (3.1 percent) was closest, while New Jersey (1.1 percent) and Chicago (1 percent) were lower.

Through the end of September, 9.1 million square feet broke ground across 53 properties, slightly below the 13 million square feet during the same period last year.

One of the largest projects underway in the metro is Meta’s Building 3, a 1.5 million-square-foot facility within the Meta Mesa Data Center. The development, rising on 200 acres at 3841 S. Ellsworth Road, ranks as Phoenix’s fourth-largest industrial project currently under construction and is slated for completion in early next year.

Trammell Crow Co. also begun construction on West 101 Logistics Center, its latest project in Phoenix. Upon completion, the industrial park will total more than 1 million square feet across five buildings.

Deliveries slow but stay above national average

As of the end of September, Phoenix delivered almost 14 million square feet across 75 properties, representing 3.2 percent of stock and outpacing the 1.1 percent national average. The delivery pace slowed from last year’s 25.1 million square feet across 130 facilities.

Rendering of XNRGY's manufacturing facility at 9019 E. Technology Way in Mesa, Ariz. — XNRGY’s manufacturing facility at 9019 E. Technology Way in Mesa, Ariz., is the first building to come online within Gateway East, a more than 270-acre business park. *Image courtesy of XNRGY Climate Systems*

Among peer markets, only Dallas (14.7 million square feet) delivered more, with Kansas City (12.2 million square feet) close behind. Indianapolis (1.4 million square feet), New Jersey (4 million square feet) and Atlanta (4.4 million square feet) trailed.

Earlier this year, XNRGY Climate Systems completed its first U.S. manufacturing facility—a 275,000-square-foot property in Mesa, Ariz. The building marks the initial phase of a planned 1 million-square-foot sustainable manufacturing and headquarters campus. The four-phase development represents a total investment of $300 million.

Investment activity remains strong

Lincoln Property Co.’s Park303 logistics park near Glendale, Ariz. — Dollar Tree acquired a 1.3 million-square-foot industrial building in the second phase of the 3.8 million-square-foot industrial campus from Lincoln Property Co. for $147.1 million. Image courtesy of Lincon Property Co.

Phoenix recorded almost $2.7 billion in industrial transaction volume year-to-date through September. Some 175 facilities totaling 16.7 million square feet changed hands, with pricing averaging $173.27 per square foot.

Only New Jersey had higher number at $224.37 per square foot, while Indianapolis ($97.83 per square foot), Chicago ($90.13 per square foot) and Kansas City ($87.46 per square foot) were lower.

Dollar Tree purchased a 1.3 million-square-foot Class A industrial building at Lincoln Property Co.’s Park303 logistics campus near Glendale, Ariz., for $147.1 million. The property will serve as the company’s first regional distribution facility in the Phoenix metro. It is located within Lincoln’s 210-acre, 3.8 million-square-foot complex and is one of three facilities in the 2.5 million-square-foot second phase of the development.

In September, INDUS Realty Trust acquired a three-building industrial portfolio totaling 731,571 square feet in Tolleson, Ariz., within the Phoenix metro area. The company purchased the assets from Link Logistics for approximately $116.7 million, according to Yardi Research Data.

Vacancy edges up, rents hold steady

Phoenix’s vacancy rate was 8.2 percent as of the end of September, below the 9.5 percent national average, according to the recent Yardi Matrix report. The metro’s in-place rents averaged $9.72 per square foot, marking a 6 percent year-over-year increase, while newly signed leases averaged $10.78 per square foot—$1.06 higher than the existing rent base.