Manufacturing properties are driving Phoenix industrial rental rates

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According to JLL’s Q2 Phoenix Industrial Insight Report, the hot activity of manufacturing companies is driving up industrial rental rates. In the last year alone, manufacturing rates have surged 18.6 percent, to $0.59 per square foot. This sector has been particularly active in the Southeast Valley, especially in Tempe and Mesa.

According to JLL’s Executive Vice President Steve Sayre, one reason manufacturing companies are being drawn to this area of Phoenix because of the unique product available.

“The Southeast Valley is known for a highly-educated labor force but it’s the development of new construction with characteristics to meets the unique needs of manufacturing companies that is especially attractive,” said Sayre. “New construction enables companies to design their entire space as desired to gain efficiencies, increase productivity and consolidate operations. This new product also allows for growth, giving companies the flexibility they need.”

Sayre also credits the communities in the Southeast for positioning themselves for success by investing in increased and more robust utility infrastructure including water, waste water and power.

“Build-to-suit activity in this area is the highest it’s ever been. About two-thirds of the recent activity we’ve seen in the Southeast Valley is from companies expanding or those new to town altogether,” said Sayre. “And tenants are a variety of manufacturing types including, but not limited to, probiotics, nutraceuticals, packaging, plastics, low tech, automotive, solar tech and aerospace.”

Learn more about the Phoenix industrial market by downloading our Q2 Phoenix Industrial Insight Report.


About the author
Kiana Cox, Senior Research Analyst
Kiana Cox is a senior research analyst in the JLL Phoenix office who works closely with brokerage and support professionals throughout the western region, as well as colleagues throughout the global JLL organization, to provide best-in-class research that differentiates JLL.


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