Q120172017

PHOENIX METRO PHOENIX METRO INDUSTRIALINDUSTRIAL

MARKETMARKETREPORTREPORT

Q1 2017 | Phoenix Industrial Market Overview

Valley Industrial Posts First Single-Digit Vacancy Rate Since ‘07

Total Sales:

$194.0MQ4 2016: $412.4M

No. of Transactions:

158Q4 2016: 119

Average PSF:

$79.09Q4 2016: $68.74

Actual Cap Rates:

7.51%Q4 2016: 7.17%

Q1 2017 Top Industrial Leases

Q1 2017 Top Industrial Sales

Sales by the Numbers: Q1 2017

The Phoenix industrial sector began 2017 in solid fashion, breaking a double-digit hold on vacancy rates in nearly 10 years. Vacancy, construction and net absorption were in positive territory this quarter. Speculative construction activity remained strong for multi-tenant warehouse space to meet the growing market demand of tenants. An example of this need was a surge in homebuilder-related businesses, such as cabinet makers, window and door manufacturing companies that are expanding their businesses.

The Phoenix market continues to be a viable alternative for out of state companies to relocate as rental rates and abundant availability of existing product and land to build continues to partially fuel the Valley’s industrial sector. Many out of state buyers are bullish on sales opportunities in Phoenix as cap rates are attractive compared to other

markets, such as Southern California. On the negative side, leasing activity (leasing deals signed this quarter for future occupancy) was below historic norms. Flex property absorption was negative in three of the four submarket clusters. In addition, asking NNN rental rates remained fl at in Q1.

Positive indicators moving forward show strong gross absorption fi gures (occupied space over a specifi c period) for the quarter, as this shows future occupancy trends. Net absorption was still strong, factoring all vacated space as well. This bodes well for 2017 going forward.

Industrial vacancy posted a 9.8% rate, 20-basis points less than the previous quarter and the lowest since Q4 2007. The Northwest and Northeast submarket clusters have the lowest vacancy rates. The Southeast Valley posted the highest. Net absorption was

calculated at 1,930,399 per SF with most of it concentrated in the SW Valley.

Deliveries to inventory totaled 2,031,308 SF. The Northwest Valley had 986,313 SF delivered this quarter, the most of any submarket cluster. Under construction activity is up nearly 1 million SF over last quarter to 4,809,131 SF. The Southwest Valley dominated construction inventory as most buildings are large distribution and logistics buildings.

The largest lease transaction for the quarter was the Essendant Co. lease of a 261,880 SF distribution facility at Liberty Logistics Center II, 1500 S. 71st Ave., Tolleson. The largest sales transaction was an 11-building portfolio of fl ex buildings at 9014 N. 23rd Ave., Phoenix. BKM Capital Partners paid $17,200,000 for a total of 226,645 SF. Price per SF was $75.89.

Tenant Name Property Name Address Submarket Type SF LeaseEssendant Co. Liberty Logistics Center II 1500 S. 71st Ave., Tolleson Southwest Distribution 261,880 NewLaMi Products, Inc. Buckeye Logistics Center 6913 W. Buckeye Rd., Tolleson Southwest Distribution 216,845 SubleaseEnclos Riverside Distribution Ctr. 2225 S. 43rd Ave., Phoenix Southwest Distribution 117,780 NewBurlington Mattress Co. Ancona Tolleson Center 8591 W. Washington St., Tolleson Southwest Distribution 91,811 NewCircle K Stores, Inc. Warner Crossing 1130 W. Warner Rd., Tempe Southwest Back Office 75,489 Renewal

Property Address Buyer Seller Type Sales Price SF PSF9014 N 23rd Ave., Phoenix (11) BKM Capital Partners TA Associates Flex $17,200,000 226,645 $75.894405 W. Roosevelt St., Phoenix MS International, Inc. Annaly Commercial RE Distribution $11,960,000 187,611 $63.75685 W. LaVieve Ln., Tempe Industrial Property Trust LBA Realty Manufacturing $9,500,000 101,641 $93.474150 S. Riverpoint Pky., Phoenix West Second St. Assoc. LNR Partners, LLC Flex $8,350,000 132,880 $62.842021 E. Jones Ave., Phoenix S&M Moving Systems Cohen Asset Mgmt. Distribution $7,068,932 94,885 $74.50

Absorption/Vacancyin SF, 2007-2017

7.9%

9.7%

16.9%

12.3%9.8%

0.0%

5.0%

10.0%

15.0%

20.0%

-5.00

0.00

5.00

10.00

Absorption Vacancy

Buyer TypeQ1 2017 Sales

16%

49%

22%

4%9%

User PrivateInstitutional Private Equity

Rental RatesPer month, 2007-2017

$0.66

$0.54

$0.49$0.52

$0.55

$0.57

$0.45

$0.50

$0.55

$0.60

$0.65

$0.70

07 09 11 13 15 YTD 17

NNN Asking Rates

Economic Indicatorsas of Q1 2017

Source: Bureau of Labor Statistics, Bureau of Economic Analysis of the U.S. Dept. of

Unemployment U.S. Down to 4.7% Arizona Steady at 5.0% Phoenix Metro Down to 4.5%

Consumer Price Index Up 0.2%U.S. GDP Up 2.2%

Q1 2017 Phoenix Industrial Market Stats

South Mountain Park

Usery MountainRecreation Area

Four PeaksWilderness

McDowell MountainRegional Park

Thunderbird ConservationPark

PapagoPark

Piestewa PeakPark

North MountainPark

PhoenixMountainPreserve

Buffalo RidgePark

Estrella Mountain Park

51

89

101

101

101

101

202

202

202

202

303

60

60 60

Mesa-GatewayAirport

Falcon FieldAirport

ScottsdaleMunicipal Airport

GlendaleMunicipal Airport

Luke Air ForceBase

ChandlerMunicipal Airport

Deer ValleyMunicipal Airport

91st A

ve.

91st A

ve.

99th A

ve.

99th A

ve.

107th

Ave

.10

7th A

ve.

107th

Ave

.

111th

Ave

.

Tess

mer

Rd.

103rd

Ave

.

107th

Ave

.

Avon

dale

Ave

.

El M

irage

Rd.

El M

irage

Rd.

Dys

art A

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Litc

hfie

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Bulla

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Bulla

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Nas

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Estre

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Ree

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Rd.

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Alsu

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Cot

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Ln.

Cot

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Cot

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Citr

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Rd.

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Rd.

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Bulla

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Ree

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Sariv

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Cot

ton

Ln.

Cot

ton

Ln.

Perry

ville

Rd.

Perry

ville

Rd.

175th

Ave

.

Citr

us R

d.C

itrus

Rd.

187th

Ave

.18

6th A

ve.

Jack

rabb

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Jack

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Rai

nbow

Val

ley

Rd.

ley

Rd.

Vera

do W

ay

83rd A

ve.

75th A

ve.

67th A

ve.

McDowell Rd.McDowell Rd.

Van Buren St.

Yuma Rd.

Van Buren St.Van Buren St.

Broadway Rd. Broadway Rd.

Southern Ave.Southern Ave.Southern Ave.

Estrella Dr.

Baseline Rd.

Broadway Rd.

University Dr.

Apache Blvd.

Broadway Rd.

Main St.

University Dr.

Rio Salado Pkwy.Rio Salado Pkwy.

Southern Ave. Southern Ave.

Broadway Rd.

Main St.

University Dr.

Brown Rd.

Southern Ave.

Baseline Rd. Baseline Rd. Baseline Rd. Baseline Rd.

Guadalupe Rd.

Elliot Rd.

Warner Rd.

Ray Rd.

Chandler Blvd.

Elliot Rd.

Warner Rd.

Ray Rd.

Chandler Blvd.

Frye Rd.

Pecos Rd.

Germann Rd. Germann Rd. Germann Rd.

Q C k Rd

Pecos Rd. Pecos Rd.

Pecos Rd.

Pecos Rd.

Elliot Rd.

Warner Rd.

Elliot Rd. Elliot Rd.

Warner Rd.

Ray Rd. Ray Rd.Ray Rd.

Williams Field Rd. Williams Field Rd.

Guadalupe Rd.

Houston Ave.

Guadalupe Rd. Guadalupe Rd. Guadalupe Rd.

Baseline Rd.

Dobbins Rd.Dobbins Rd.Dobbins Rd.

Carver Rd.

Baseline Rd.

Buckeye Rd. Buckeye Rd.

Southern Ave.

Lower Buckeye Rd.

Broadway Rd.

Indian Springs Rd.

Thomas Rd.

Indian School Rd.Indian School Rd.Indian School Rd.

Camelback Rd.Camelback Rd.Camelback Rd.

Bethany Home Rd.Bethany Home Rd.

Glendale Ave.Glendale Ave.Glendale Ave.

Northern Ave.Northern Ave.

Olive Ave.

Peoria Ave.

Cactus Rd.

Indian School Rd.

Camelback Rd.

Bethany Home Rd.

Glendale Ave.

Northern Ave.

Olive Ave.

Peoria Ave.

Cactus Rd.

Thunderbird Rd. Thunderbird Rd.

Indian School Rd.

Camelback Rd.

McDowell Rd.

Mckellips Rd. Mckellips Rd.

Broadway Rd.

Main St.

University Dr.

Brown Rd. Brown Rd.

Southern Ave.

Broadway Rd.

Main St.

University Dr.

Southern Ave.

Mckellips Rd.

Curry Rd.

Mckellips Rd.

McDowell Rd. McDowell Rd. McDowell Rd.

Longbow Pkwy.

Thomas Rd. Thomas Rd. Thomas Rd.

Saddleback St.

Indian School Rd.Indian School Rd.

Camelback Rd.

Camelback Rd.

Chaparral Rd. Chaparral Rd.

Indian Bend Rd.

Mountain View Rd.Mountain View Rd.

Shea Blvd. Shea Blvd.Shea Blvd.

Via Linda

Palis

ades

Blv

d.

Golden Eagle Blvd.

McD

owel

l Mou

ntai

n R

d.

McD

owe

Via Linda

Shea Blvd.

Cholla St.Cholla St.

Lincoln Dr.

DoubleTree Ranch Rd.

McDonald Dr. McDonald Dr.Bethany Home Rd.

Glendale Ave.

Lincoln Dr.

Northern Ave.

Indian School Rd.

Camelback Rd.

Bethany Home Rd.

Glendale Ave.

Northern Ave.

Dunlap Ave. Dunlap Ave.

Hatcher rd.

Peoria Ave.

Cactus Rd. Cactus Rd.

Sweetwater Ave.

Cactus Rd.Cactus Rd. Cactus Rd.

Thunderbird Rd. Thunderbird Rd.

Greenway Rd.

Thunderbird Rd.

Greenway Rd.

Grovers Ave.

Greenway Rd.

Bell Rd.Bell Rd.

Greenway Rd.

Waddell Rd.

Cactus Rd.

Peoria Rd.

Olive Ave.Olive Ave.

Northern Pkwy.

Northern Ave.

Sun Valley Pkwy. Bell Rd.Bell Rd. Bell Rd. Bell Rd.

Raintree Dr.

Frank Lloyd Wright Blvd.

Bell Rd.

Union Hills Dr. Union Hills Dr.Union Hills Dr.

Union Hills Dr.

Beardsley Rd.

Yorkshire Dr.

Rose Garden Ln.

Deer Valley Rd.

Deer Valley Rd.Deer Valley Dr.

59th A

ve.

51st A

ve.

43rd A

ve.

35th A

ve.

83rd A

ve.

83rd A

ve.

75th A

ve.

75th A

ve.

67th A

ve.

59th A

ve.

59th A

ve.

51st A

ve.

43rd A

ve.

35th A

ve.

35th A

ve.

39th A

ve.

29th A

ve.

27th A

ve.

91st A

ve.

99th A

ve.

83rd A

ve.

75th A

ve.

51st A

ve.

51st A

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43rd A

ve.

35th A

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27th A

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19th A

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19th A

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23rd A

ve.

27th A

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19th A

ve.

15th A

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7th A

ve.

7th A

ve.

12th S

t.

16th S

t.

15th A

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12th S

t.

16th S

t.

24th S

t.24

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t.

32nd

St.

36th S

t.

40th S

t.

44th S

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48th S

t.

32nd

St.

64th S

t.64

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t.

94th S

t.

96th S

t.

56th S

t.

44th S

t.

40th S

t.

36th S

t.

32nd

St.

28th S

t.

Tatu

m B

lvd.

Tatu

m B

lvd.

Mayo Blvd.

Tatu

m B

lvd.

68th S

t.C

olle

ge A

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68th S

t.

Scot

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d.Sc

otts

dale

Rd.

Scot

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d.R

ural

Rd.

McC

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Mill

Ave.

Mill Ave.

Har

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r.H

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Dr.

Prie

st D

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Rur

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Kyre

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Rd.

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Prie

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Hay

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Hay

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d.Ex

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Cen

ter S

t.C

ente

r St.

Mes

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r.M

esa

Dr.

Gra

ntite

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f Rd.

Hor

ne

Stap

ley

Dr.

Gilb

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d.G

ilber

t Rd.

Lind

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Rd.

Val V

ista

Dr.

Gre

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Hig

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Rd.

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ld R

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Hig

ley

Rd.

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Soss

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Rd.

Soss

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Rd.

Rittenhouse Rd.

McQ

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Rd.

Coo

per R

d.

Gilb

ert R

d.

Lind

say

Rd.

Val V

ista

Dr.

Gre

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Hig

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Rd.

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McQ

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Gilb

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Lind

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Rd.

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Dr.

Gre

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ld R

d.

Hig

ley

Rd.

Pow

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d.

Haw

es R

d.

Ells

wor

th R

d.

Cris

mon

Rd.

Ells

wor

th R

d.El

lsw

orth

Rd.

Cris

mon

Rd.

52nd

St.

52nd

St.

7th S

t.7th

St.

Cen

tral A

ve.

83rd A

ve.

75th A

ve.

67th A

ve.

59th A

ve.

51st A

ve.

43rd A

ve.

35th A

ve.

27th A

ve.

19th A

ve.

7th A

ve.

12th S

t.

16th S

t.

7th S

t.

Cen

tral A

ve.

Cen

tral A

ve.

7th A

ve.

7th S

t.

Cen

tral A

ve.

Cor

al G

ables

Dr.

L

Cav

e C

reek

Blvd

.

Mayo Blvd.

28th

Dr.

Metro

Pkw

y.

Lake Pleaseant Pkwy.

Beardsley Rd.

Verd

e Vi

sta D

r.

Indian School Rd.

Aco m

W. P

oint P

kwy.

Par k

view

Pl.

NW R

anch

Pk wy.

128t

h Ave

.

Mou

ntai

Ellio

t Rd.

Estre

lla P

kwy.

Thompson Peak Pkwy.

Le gacy Blvd.

Legacy Blvd.

Frank Lloyd Wright Blvd.

Hayd

en Rd.

McCormic k Pkwy.

Gal

vin P

kwy.

Founta

in H

ills B

lvd.

Sag

uaro

Blv

d.

Mohave Rd.

Fort

McD

owel

l Rd.

Mus

tang

Way

Para

dise V

illage Pkwy.

Lower Buckeye Rd.Lower Buckeye Rd.

Haw

es R

d.Rid g ecr

est

Eagle Crest Dr.

Ash

Ave.

Sara

toga

L indner Ave.

Soss

aman

Rd.

Indian School Rd.

Deer Valley Rd.

40th S

t.

Sunridge Dr.

Ray Rd.

Chandler Blvd.Chandler Blvd.

Pecos Rd.Pecos Rd.

48th S

t.

40th S

t.

Mountain Pkwy.

Ranch

Cir

Ray Rd.

Des

ert F

ooth

ills P

kwy.

17th A

ve.

Lakewood Pkwy.

TEMPE

SCOTTSDALE

PARADISE VALLEY

GOODYEAR

GLENDALE

PEORIA

SURPRISE

CHANDLER

GILBERT

FOUNTAIN HILLS

MESA

Southern AvSouthern Av

Estrella Mountain Park

El M

irage

Rd.

ElM

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Rd

Bulla

rd A

ve.

Bulla

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Estre

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kwy.

Estre

llaPk

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Cot

ton

Ln.

Cot

ton

Ln

Cot

ton

Ln.

Cot

ton

Ln

McDowell Rd.McDowell Rd

Van Buren St.Van Buren StVan Buren St.Van Buren St

Southern AvSouthern AvSouthern Ave.Southern Ave.Southern Ave.Southern Ave.

Baseline RBaseline RBaseline RdBaseline Rd

Dobbins Rd.Dobbins Rd

Baseline Rd.Baseline Rd

BuckBuck k e RdRd

Indian Springs Rd.Indian Springs Rd

7575thth

Ave

Ave

4343rdrd A

ve.

Ave

3535thth A

ve.

Ave

2727thth A

ve.

Ave

1919thth A

ve.

Ave

y

Lower BLower B

GOODYEARDYEAG

Thunderbird CConservationPaark

alo RidgeBuffalo arkPa

101

303

60

GlendaleMunicipal AirportrtAir

Luke Air ForceBase

Deer ValleyValleyMunicipal Airportnicipal Airporti i

yy

Ave.

Ave

9999thth

Ave

Ave

9999thth A

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Ave

107

107thth

Ave

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710

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Ave

107

107thth

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111

111thth

Ave

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Perry

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Perry

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Rd.

Perry

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175

175thth

Ave

.Av

e

Citr

us R

d.C

itrus

Rd

Citr

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d.C

itrus

Rd

187

187thth

Ave

.Av

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618

6thth A

ve.

Ave

Jack

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Jack

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McDowell RdMcDowell RdMcDowell Rd.McDowell Rd

Van Buren St.Van Buren St

Yuma Rd.Yuma Rd

Southern Ave.Southern Ave

Lower Buckeye Rd.Lower Buckeye Rd.

Broadway Rd.Broadway Rd

Thomas Rd.Thomas Rd

dian School Rd.IndIndian School RdIndian School Rd.Indian School Rd

Camelback Rd.Camelback RdCamelback Rd.Camelback Rd

Bethany Home Rd.Bethany Home RdBethany Home Rd.Bethany Home Rd

Glendale Ave.Glendale AveGlendale Ave.Glendale Ave.

rthern Ave.NorthNorthern Ave

Olive Ave.Olive Ave

Peoria Ave.Peoria Ave

Cactus Rd.Cactus Rd

ol Rd.ol Rd

k Rd.k Rd

me Rd.me Rd

Ave.Ave

Ave.Ave

Olive Ave.Olive Ave

Peoria Ave.Peoria Ave

Cactus Rd.Cactus Rd

Thunderbird Rd.Thunderbird Rd Thunderbird Rd.Thunderbird Rd

Indian School Rd.Indian School Rd

Camelback Rd.Camelback RdC

Bethany Home Rd.Bethany Home Rd

Glendale Ave.Glendale Ave

Northern Ave.Northern Ave

Dunlap Ave.Dunlap Ave

Peoria Ave.Peoria Ave

Cactus Rd.Cactus Rd

Thunderbird Rd.Thunderbird Rd

Greenway Rd.Greenway Rd

Grovers Ave.Grovers Ave

Greenway Rd.Greenway Rd

Bell Rd.Bell Rd.Bell Rd.Bell Rd.

Greenway Rd.Greenway Rd

Waddell Rd.Waddell Rd

Cactus Rd.Cactus Rd

Peoria Rd.Peoria Rd

Olive Ave.Olive AveOlive Ave.Olive Ave

Northern Pkwy.Northern Pkwy

Northern Ave.Northern AveNorthern Ave

Sun Valley Pkwy.Sun Valley Pkwy Bell Rd.Bell RdBell Rd.Bell Rd.

Union Hills Dr.Union Hills Dr. Union Hills Dr.Union Hills DrUnion Hills Dr.Union Hills Dr

Yorkshire Dr.Yorkshire Dr

Rose Garden Ln.Rose Garden Ln

Deer Valley Rd.Deer Valley Rd.

Deer Valley Rd.Deer Valley RdDeer Valley Dr.Deer Valley Dr

5959thth A

ve.

Ave

5151stst A

ve.

Ave

4343rdrd A

ve.

Ave

3535thth A

ve.

Ave

8383rdrd A

ve.

Ave

8383rdrd A

ve.

Ave

7575thth A

ve.

Ave

7575thth A

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6767thth A

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Ave

5959thth A

ve.

Ave

5959thth A

ve.

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5151stst A

ve.

Ave

4343rdrd A

ve.

Ave

3535thth A

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Ave

3535thth A

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Ave

3939thth A

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2929thth A

ve.

Ave

2727thth A

ve.

Ave

1919thth

Ave

Ave

1919thth A

ve.

Ave

2323rdrd A

ve.

Ave

2727ththth A

ve.

Ave

1515thth A

ve.

Ave

77thth A

ve.

Ave

1212thth S

t.St

1616thth S

t.St

77thth S

t.St

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101

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McDowell Rd.McDowell Rd

Mckellips RdMckellips RdMckellips RdMckellips Rd.

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Thomas Rd.Thomas Rd Thomas Rd.Thomas Rd

Indian School Rd.Indian School RdIndian School Rd.Indian School Rd

Camelback Rd.Camelback Rd

Camelback Rd.Camelback Rd

Chaparral Rd.Chaparral Rd Chaparral Rd.Chaparral Rd

Indian Bend Rd.Indian Bend Rd

Mountain View Rd.Mountain View Rd

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DoubleTree Ranch Rd.DoubleTree Ranch Rd

McDonald Dr.McDonald Dr

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Indian School Rd.ScIndian School Rd

Camelback Rd.bCamelback Rd

Bethany Home Rd.Bethany Home Rd

Glendale Ave.Glendale Aveda

Northern Ave.Northern Ave

Dunlap Ave.Dunlap Ave

Hatcher rd.hHatcher rd

Cactus Rd.Cactus Rdu

Sweetwater Ave..Sweetwater AveSSweetwater Ave

Cactus Rd.Cactus RdCactus Rd.Cactus Rd Cactus Rd.Cactus Rd

Thunderbird Rd.Thunderbird Rd

Greenway Rd.Greenway Rd

Thunderbird Rd.Thunderbird Rd

Bell Rd.Bell Rd Bell Rd.Bell Rd

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Broadway Rd.Broadway Rd

University Dr.University Dr

Apache Blvd.Apache Blvd

Broadway Rd.Broadway Rdw

Main St.Main St

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Southern Ave.Southern Ave Ave.AveSouthernSouthernn

University Dr

Brown Rd.Brown Rd

Baseline Rd.Baseline Rd Baseline Rd.Baseline Rd Baseline Rd.Baseline Rd

Guadalupe Rd.Guadalupe Rd

Elliot Rd.Elliot Rd

Warner Rd.Warner Rd

Ray Rd.Ray Rd

Chandler Blvd.Chandler Blvd

Elliot Rd.Elliot Rd

Warner Rd.Warner Rd

Ray Rd.Ray Rd

Chandler Blvd.Chandler Blvd

Frye Rd.Frye Rd.

Pecos Rd.Pecos Rd

Germann Rd.Germann Rd Germann Rd.Germann Rd. Germann Rd.Germann Rd.

Pecos Rd.Pecos Rd Pecos Rd.Pecos Rd

Pecos Rd.Pecos Rd

Pecos Rd.Pecos Rd

Elliot Rd.Elliot Rd

Warner Rd.Warner Rd

Elliot Rd.Elliot Rd Elliot Rd.Elliot Rd

Warner Rd.Warner Rd

Ray Rd.Ray Rd Ray Rd.Ray RdRay Rd.Ray Rd

Williams Field Rd.Williams Field Rd Williams Field Rd.Williams Field Rd

Guadalupe Rd.Guadalupe Rd Guadalupe Rd.Guadalupe Rd Guadalupe Rd.Guadalupe Rd

Baseline Rd.Baseline Rd

Dobbins Rd.Dobbins RdDobbins Rd.Dobbins Rd

Carver Rd.Carver Rd

Mckellips Rd.Mckellips Rd Mckellips Rd.Mckellips Rd

Broadway Rd.Broadway Rd

Main St.Main St

University Dr.University Dr

Brown Rd.Brown Rd Brown Rd.Brown Rd

Southern Ave.Southern Ave

Broadway Rd.Broadway Rd

Main St.Main St

University Dr.University Dr

Southern Ave.Southern Ave

Mckellips Rd.Mckellips Rd

Curry Rd.Curry Rd

Mckellips Rd.Mckellips Rd.

McDowell Rd.McDowell Rd McDowell Rd.McDowell Rd

Longbow Pkwy.Longbow Pkwy

Thomas Rd.Thomas Rd.

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Chandler Blvd.Chandler BlvdChandler Blvd.Chandler Blvd

Pecos Rd.Pecos RdPecos Rd.Pecos Rd

4848thth S

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1. Airport Area Submarket N. Airport S. Airport N. of Roeser S. Airport S. of Roeser SC. N. of Salt River SC. S. of Salt River

2. Northeast Submarket Central Phoenix Scottsdale Airpark Scottsdale/Salt River

3. Northwest Submarket Deer Valley/Pinnacle Peak Glendale Grand Ave. N. Black Canyon N. Glendale/Sun City

W. Phx N. of Thomas Rd. W. Phx S. of Thomas Rd.

5. Southeast Submarket Chandler Chandler Airport Chandler N./Gilbert Falcon Field/Apache Jct. Mesa Tempe East Tempe Northwest Tempe Southwest

5. Southwest Submarket Goodyear SW. N. of Buckeye Rd. SW. S. of Buckeye Rd. Tolleson

Phoenix Industrial Submarket Map

veve

77 AA

ve.

Ave

Ave

77thth S

t.St

Cen

tral A

ve.

Cen

tralA

ve

ve.ve.

RdRd

77ththAv

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eAv

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Rd.Rd

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Mountain View Rd.Mountain View Rd.

McDonald Dr.McDonald Dr

Dob

son

Rd.

Dob

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Rd

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Dr.

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e

260

9191stst A

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ve.

Ave

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8383rdrd A

ve.

Ave

7575thth A

ve.

Ave

6767ththth

Ave.

AAve

Indian School Rdian School Rd.Indian SSchool Rd

Camelback Rd.Camelback Rd

Glendale Ave.Glendale Ave

Northern Ave.Northern Ave

Indian SchooIndian Schoo

CammelbackCammelback

Bethanyy HomBethanyy Hom

Glenndale AGlenndale A

Northern ANorthern A

8383rdrd

7575thth A

6767thth

G3

Broadway Rd.Broadway Rd

Main St.Main St

University Dr.University Dr

Southuthern Ave.Southuthern Ave

BBaseline Rd.Baseline Rd.

Guadalupe Rd.Guadalupe Rd

Houston Ave.Houston Ave.

Cou

ntry

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b D

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107thth

Ave

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Avon

dale

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.Av

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onda

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Broadway Rd.Broadway Rd. Broadway Rd.Broadway Rd.

keye Rd.keye Rd. Buckeye Rd.Buckeye Rd.

9191stst

ve.

AveeAve

9999thth A

ve.

Ave

8383rdrd A

ve.

Ave

Lower Buckeyckeye Rd.d.LLower Buckkeye Rd.

Buckeye Re RdBuckeye RRdd.

5

Industrial Total Under Asking Rent ChangeSubmarkets Inventory Total SF Q1 2017 Q1 2017 YTD Total Construction Q1 2017 YTD Total NNN Rate from Q4 2016

Sky Harbor AirportDistribution/Warehouse 34,453,173 4,035,105 11.7% 260,416 260,416 358,737 411,051 411,051 $0.58 3.6%

Manufacturing 8,746,991 619,231 7.1% 221,069 221,069 - - - $0.52 4.0%

Flex 5,426,953 1,317,975 24.3% (10,075) (10,075) - - - $1.15 1.8%

Total 48,627,117 5,972,311 12.3% 471,410 471,410 358,737 411,051 411,051 $0.68 1.5%

Northeast ValleyDistribution/Warehouse 6,758,388 619,044 9.2% (79,148) (79,148) 151,728 54,372 54,372 $0.89 5.9%

Manufacturing 2,999,748 101,821 3.4% (7,636) (7,636) - - - $0.86 -1.1%

Flex 5,258,419 476,979 9.1% (16,735) (16,735) - - - $0.96 -1.0%

Total 15,016,555 1,197,844 8.0% (103,519) (103,519) 151,728 54,372 54,372 $0.92 1.1%

Northwest ValleyDistribution/Warehouse 39,366,650 3,139,523 8.0% (181,741) (181,741) 1,413,458 618,350 618,350 $0.56 -3.4%

Manufacturing 11,474,108 382,722 3.3% (64,112) (64,112) 66,612 - - $0.54 -5.3%

Flex 6,215,282 590,553 9.5% 7,254 7,254 50,937 - - $1.08 33.3%

Total 57,056,040 4,112,798 7.2% (238,599) (238,599) 1,531,007 618,350 618,350 $0.60 5.3%

Southeast ValleyDistribution/Warehouse 49,783,039 4,270,135 8.6% 118,614 118,614 206,312 147,225 147,225 $0.58 0.0%

Manufacturing 24,254,141 3,189,801 13.2% 10,705 10,705 146,832 - - $0.58 -1.7%

Flex 15,158,313 2,036,545 13.4% (131,551) (131,551) 161,470 - - $1.11 -1.8%

Total 89,195,493 9,496,481 10.6% (2,232) (2,232) 514,614 147,225 147,225 $0.72 0.9%

Southwest ValleyDistribution/Warehouse 77,020,470 7,513,145 9.8% 1,225,991 1,225,991 1,850,653 432,347 432,347 $0.37 0.0%

Manufacturing 10,702,545 853,434 8.0% 518,414 518,414 402,392 - - $0.38 0.0%

Flex 1,338,887 156,956 11.7% 58,944 58,944 - - - $0.75 15.4%

Total 89,061,902 8,523,535 10.0% 1,803,349 1,803,349 2,253,045 432,347 432,347 $0.36 1.4%

Total SubmarketsDistribution/Warehouse 207,381,720 19,918,098 9.6% 1,344,122 1,344,122 3,980,888 1,663,345 1,663,345 $0.48 0.0%

Manufacturing 58,177,533 5,147,009 8.8% 678,440 678,440 615,836 - - $0.53 3.9%

Flex 33,397,854 4,579,008 13.7% (92,163) (92,163) 212,407 - - $1.09 1.9%

Phoenix Metro Total 298,957,107 29,644,115 9.8% 1,930,399 1,930,399 4,809,131 1,663,345 1,663,345 $0.57 0.0%

When inaccurate or newly updated information is discovered, it is incorporated into current reporting which may negate comparison to previously published market reports.

Vacancy Building CompletionsNet Absorption

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Q120172017

The information and details contained herein have been obtained from third-party sources believed to be reliable; however, Lee & Associates Arizona has not independently verifi ed its accuracy. Lee & Associates Arizona makes no representations, guarantees, or express or implied warranties of any kind regarding the accuracy or completeness of the information and details provided herein, including but not limited to the implied warranty of suitability and fi tness for a particular purpose.

Interested parties should perform their own due diligence regarding the accuracy of the information. The information provided herein, including any sale or lease terms, is being provided subject to errors, omissions, changes of price or conditions, prior sale or lease, and withdrawal without notice, by third-party data source providers.

The Lee & Associates Phoenix Industrial Market report compiles relevant market data by using a third-party database for the proprietary analysis of specifi c warehouse, distribution, manufacturing and fl ex properties in the Phoenix Metropolitan Area.

© Copyright 2017 Lee & Associates Arizona. All rights reserved.

Market report analysis by: Matt DePinto, Senior Research Analyst

About This Report