Why Metro Phoenix Is Attractive To Industrial, Logistics Companies
A new report puts the Valley among top markets for certain real estate investors.
CBRE, a commercial real estate services and investment firm, analyzed secondary markets for industrial and logistic real estate opportunities. It starts from when a product leaves a manufacturing line and covers every stop until it arrives at a store or your home.
Rusty Kennedy, senior vice president, said lower labor costs, reliable utilities, and having two rail options are key selling points-especially for companies looking for alternatives to California.
“That’s really been what’s attracting folks from the midwest, the northeast, southeast, really across the country is we can hit 33 million people across seven states in a single day’s haul,” he said.
Since 2013, CBRE said more industrial space has been absorbed (54.4 million sq.ft) than has been built (43.3 million sq.ft). As vacancy rates have dropped, asking rates for leases have gone up.
Over the next twenty years, Kennedy expects Phoenix will become a primary market, competing with more established cities like New York, Chicago and Los Angeles.
“Ten years ago we used to celebrate when somebody would consider Phoenix, and then five years ago we would kind of celebrate when they came and tour and we lost,” he said. “Now, we’re winning more than our fair share of the regional competitions for these large corporations. I think that’s going to continue.”
CBRE listed 14 markets as "strategic options" along with metro Phoenix. They include Las Vegas; Salt Lake City; Milwaukee; Reno, Nevada; St. Louis; El Paso, Texas; Detroit; Greenville-Spartanburg, South Carolina; Dayton, Ohio; San Antonio, Texas; Savannah, Georgia; Central Valley, California; and northeastern Pennsylvania.