Industrial market recovery continues as vacancy declines
The Phoenix industrial market continued to recover in Q2 2026 as tenant demand outpaced new supply. Vacancy declined 220 basis points year over year to 14.2%, reflecting the market's continued absorption of excess deliveries from the previous construction cycle. Although year-to-date net absorption totaled 7.0 million square feet (msf), down 1.4 msf from the same period last year, and the lower deliveries of 3.2 msf helped keep the vacancy rate from rising sharply. Tightening vacancy also supported 4.7% year over year asking rent growth, with monthly rents increasing to $0.87 per square foot.