The following reflects Phoenix industrial market conditions as of Q3 2026.
MARKET DRIVERS
Arizona’s industrial market continued to expand in Q3 2026 as strong tenant demand met a substantial volume of new construction across the Valley. Ongoing investment in logistics, advanced manufacturing, and other industrial sectors supported leasing activity and absorption, while major users continued to grow their presence in the market.
New supply was a defining feature of the quarter, with 3.4M SF delivered in 3Q26. Deliveries more than tripled from the prior quarter, reflecting the significant amount of new space entering the market. Even so, smaller-bay properties continued to benefit from reduced competition from new big-box space.
The total vacancy rate fell 180 bps year over year to 11.5%, while total availability declined 40 bps to 14.0%.
Leasing activity totaled 7.6M SF, and direct net absorption reached 2.9M SF. Glendale recorded 1.5M SF of absorption, roughly half of Phoenix’s total. Chandler North/Gilbert and Southwest North of Buckeye Road followed, each contributing roughly one-third of Glendale’s absorption.
Direct average asking rents for spaces of 10K SF and larger rose 5% year over year to $1.18 PSF NNN.
ECONOMIC REVIEW
Arizona added 17,400 jobs since August 2025, according to the Arizona Office of Economic Opportunity. The state’s unemployment rate rose 50 bps year over year to 4.9% in August. Continued employment growth across Arizona’s technology, manufacturing, logistics, and other business sectors is supporting economic activity and contributing to demand for industrial space throughout the Valley.
NEAR-TERM OUTLOOK
Entering the final quarter of 2026, vacancy is expected to remain stable as continued tenant demand supports market activity. Glendale is likely to remain an important demand driver, supported by its proximity to TSMC-related supplier and logistics activity.
Frequently Asked Questions
What is the industrial vacancy rate in Phoenix in Q3 2026?
The total industrial vacancy rate in Phoenix was 11.5% in Q3 2026, down 180 bps from 13.3% in Q3 2025 and up slightly from 11.4% in Q2 2026, according to Kidder Mathews research. The direct vacancy rate was 10.3%. By property type, Manufacturing and Warehouse space had a total vacancy rate of 12.2%, General Industrial 11.5%, and Flex 10.0%. (Data source: CoStar)
What is the industrial availability rate in Phoenix in Q3 2026?
Total industrial availability in Phoenix was 14.0% in Q3 2026, down 40 bps from 14.4% a year earlier and up from 13.3% in Q2 2026, according to Kidder Mathews research. Availability remains higher than the 11.5% total vacancy rate because it includes space that is on the market but not yet vacant. (Data source: CoStar)
What are the average industrial asking rents in Phoenix in Q3 2026?
The direct average asking lease rate for Phoenix industrial space was $1.18 per square foot per month NNN in Q3 2026, up 5% from $1.13 in Q3 2025 and unchanged from Q2 2026, according to Kidder Mathews research. Submarket averages ranged from $0.76 in SC South of Salt River to $1.78 in Scottsdale/Salt River. By property type, Manufacturing and Warehouse averaged $1.15, General Industrial $0.82, and Flex $1.28. (Data source: CoStar)
How much industrial space was leased in Phoenix in Q3 2026?
Phoenix industrial leasing activity totaled 7,563,943 SF in Q3 2026, according to Kidder Mathews research. Year-to-date leasing reached 24,561,902 SF, up 5% from 23,423,505 SF in the same period of 2025. Glendale was the most active submarket for the quarter with 2,010,354 SF of leasing activity. (Data source: CoStar)
What was industrial net absorption in Phoenix in Q3 2026?
Phoenix recorded 2,854,020 SF of direct net absorption in Q3 2026, meaning tenants occupied that much more industrial space than they vacated during the quarter, according to Kidder Mathews research. Year-to-date net absorption reached 12,765,987 SF, up 8% from 11,792,440 SF a year earlier. Glendale led all submarkets with 1,545,446 SF, roughly half of the market total, followed by Chandler North/Gilbert at 559,190 SF and Southwest North of Buckeye Road at 531,331 SF. (Data source: CoStar)
How much industrial construction is underway in Phoenix in Q3 2026?
Phoenix had 14,029,434 SF of industrial space under construction in Q3 2026, with 3.4M SF delivered during the quarter, more than triple the prior quarter’s deliveries, according to Kidder Mathews research. Glendale accounted for the largest share of the pipeline at 4,332,638 SF. The largest project underway is Northern Parkway Logistics Center in Glendale, a 1,184,591 SF building owned by Merit Partners and scheduled for delivery in Q4 2026. (Data source: CoStar)
What was the largest industrial sale in Phoenix in Q3 2026?
The largest industrial sale in Phoenix in Q3 2026 was Park 303 Phase II in the Glendale submarket, a 1,113,135 SF property that sold to Nuveen for $170,250,000, or $152.95 per square foot, according to Kidder Mathews research. Lincoln Property Co. was the seller. Total sales volume reached 8,494,714 SF in the quarter and 21,379,038 SF year to date, up 13% from 18,972,386 SF a year earlier. (Data source: CoStar)
What was the largest industrial lease in Phoenix in Q3 2026?
The largest industrial lease in Phoenix in Q3 2026 was DHL’s lease of 1,146,518 SF at VT303 North – Bldg A in Glendale, signed in August 2026 with landlord VanTrust Real Estate, LLC, according to Kidder Mathews research. The next largest was nVent’s lease of 391,639 SF at 17450 W Minnezona Ave – Bldg 1 in Glendale, also in August 2026. (Data source: CoStar)
Which Phoenix industrial submarkets have the highest and lowest vacancy in Q3 2026?
North Black Canyon had the highest direct vacancy rate in Phoenix in Q3 2026 at 21.6%, followed by Chandler North/Gilbert at 20.7% and Surprise at 20.5%, according to Kidder Mathews research. The lowest direct vacancy was in West Phoenix South of Thomas Road at 2.5%, followed by Central Phoenix at 3.2% and South Airport South of Roeser at 4.0%. (Data source: CoStar)
What is the outlook for the Phoenix industrial market heading into the end of 2026?
Kidder Mathews research expects Phoenix industrial vacancy to remain stable heading into the final quarter of 2026 as continued tenant demand supports market activity. Glendale is likely to remain an important demand driver, supported by its proximity to TSMC-related supplier and logistics activity. Arizona added 17,400 jobs since August 2025, according to the Arizona Office of Economic Opportunity, while the state unemployment rate rose 50 bps year over year to 4.9% in August.
Last updated: Q3 2026. Data source: CoStar, AZ Office of Economic Opportunity, PBJ. Compiled by the Kidder Mathews Research Group.
Q3 2026 Phoenix Industrial Market: Key Data Points
Explore our full Phoenix industrial market review for deeper insights into leasing trends, sale activity, and submarket performance.
- Vacancy and availability: The total vacancy rate fell 180 bps year over year to 11.5% in Q3 2026, while total availability declined 40 bps to 14.0%.
- Leasing activity: Leasing totaled 7,563,943 SF in 3Q26 and 24,561,902 SF year to date, up 5% from 23,423,505 SF in the same period of 2025.
- Net absorption: Direct net absorption reached 2,854,020 SF in 3Q26, with Glendale contributing 1,545,446 SF, roughly half of the market total. Year-to-date absorption of 12,765,987 SF is up 8% year over year.
- Asking rents: The direct average asking rate for Phoenix industrial space was $1.18 PSF NNN, up 5% from $1.13 a year earlier.
- New supply: 3.4M SF of new industrial space was delivered in 3Q26, more than triple the prior quarter, and 14,029,434 SF remains under construction.
- Sales activity: Sales volume totaled 8,494,714 SF in 3Q26 and 21,379,038 SF year to date, up 13% from the same period of 2025. Park 303 Phase II in Glendale was the largest sale, at $170,250,000 ($152.95/SF).
- Largest lease: DHL leased 1,146,518 SF at VT303 North – Bldg A in Glendale in August 2026.
Submarket Statistics
| Submarket | Total Inventory (SF) |
Direct Vacancy Rate |
Total Vacancy Rate |
3Q26 Direct Net Absorption (SF) |
SF Under Construction |
3Q26 Total Leasing Activity (SF) |
Average Direct Rental Rate (NNN) |
|---|
| Submarket | Total Inventory (SF) | Direct Vacancy Rate | Total Vacancy Rate | 3Q26 Direct Net Absorption (SF) | SF Under Construction | 3Q26 Total Leasing Activity (SF) | Average Direct Rental Rate NNN |
|---|---|---|---|---|---|---|---|
| North Airport | 13,955,479 | 10.3% | 10.7% | -123,830 | 74,077 | 172,492 | $1.15 |
| South Airport North of Roeser | 15,156,493 | 8.8% | 10.1% | 353,325 | 135,950 | 298,163 | $1.28 |
| South Airport South of Roeser | 4,520,634 | 4.0% | 4.0% | -12,169 | 0 | 44,206 | $1.35 |
| SC North of Salt River | 14,804,887 | 7.1% | 9.0% | -35,323 | 0 | 298,633 | $1.14 |
| SC South of Salt River | 2,779,265 | 15.9% | 15.9% | -33,988 | 0 | 0 | $0.76 |
| Airport Area | 51,216,758 | 8.7% | 9.7% | 148,015 | 210,027 | 813,494 | $1.20 |
| Submarket | Total Inventory (SF) | Direct Vacancy Rate | Total Vacancy Rate | 3Q26 Direct Net Absorption (SF) | SF Under Construction | 3Q26 Total Leasing Activity (SF) | Average Direct Rental Rate NNN |
|---|---|---|---|---|---|---|---|
| Central Phoenix | 3,327,757 | 3.2% | 3.3% | -16,475 | 70,000 | 4,604 | $1.33 |
| Scottsdale Airpark | 6,558,770 | 4.6% | 5.3% | 18,871 | 0 | 43,537 | $1.74 |
| Scottsdale/Salt River | 6,352,750 | 9.6% | 9.6% | 109,775 | 267,051 | 131,113 | $1.78 |
| Northeast | 16,239,277 | 6.2% | 6.6% | 112,171 | 337,051 | 179,254 | $1.67 |
| Submarket | Total Inventory (SF) | Direct Vacancy Rate | Total Vacancy Rate | 3Q26 Direct Net Absorption (SF) | SF Under Construction | 3Q26 Total Leasing Activity (SF) | Average Direct Rental Rate NNN |
|---|---|---|---|---|---|---|---|
| Deer Valley/Pinnacle Park | 20,900,994 | 7.2% | 8.0% | 123,287 | 1,175,847 | 356,676 | $1.31 |
| Glendale | 60,901,347 | 9.4% | 11.9% | 1,545,446 | 4,332,638 | 2,010,354 | $1.07 |
| Grand Avenue | 14,735,304 | 9.0% | 9.3% | -68,360 | 418,642 | 209,941 | $0.91 |
| North Black Canyon | 4,884,498 | 21.6% | 21.9% | 64,535 | 428,011 | 19,722 | $1.13 |
| Surprise | 7,427,985 | 20.5% | 20.5% | -31,775 | 297,300 | 64,864 | $1.39 |
| West Phoenix North of Thomas Road | 7,209,446 | 4.8% | 4.8% | -60,204 | 0 | 51,882 | $1.08 |
| West Phoenix South of Thomas Road | 6,592,280 | 2.5% | 2.7% | -59,424 | 0 | 59,503 | $1.22 |
| Northwest | 122,651,854 | 9.5% | 10.9% | 1,513,505 | 6,652,438 | 2,772,942 | $1.16 |
| Submarket | Total Inventory (SF) | Direct Vacancy Rate | Total Vacancy Rate | 3Q26 Direct Net Absorption (SF) | SF Under Construction | 3Q26 Total Leasing Activity (SF) | Average Direct Rental Rate NNN |
|---|---|---|---|---|---|---|---|
| Chandler Airport | 9,759,896 | 11.6% | 19.5% | -20,147 | 507,637 | 174,155 | $1.50 |
| Chandler | 24,108,252 | 8.1% | 8.5% | -73,416 | 86,286 | 146,414 | $1.39 |
| Chandler North/Gilbert | 45,179,182 | 20.7% | 21.4% | 559,190 | 1,093,369 | 1,060,555 | $1.36 |
| Falcon Fld/Apache Junction | 6,370,062 | 11.4% | 11.9% | 54,515 | 108,296 | 37,088 | $1.40 |
| Mesa | 6,598,748 | 5.4% | 5.5% | -19,170 | 0 | 58,347 | $0.98 |
| Tempe East | 6,535,665 | 13.8% | 13.9% | 45,938 | 190,595 | 82,799 | $1.36 |
| Tempe Northwest | 9,686,535 | 8.1% | 9.1% | 40,705 | 411,580 | 98,891 | $1.27 |
| Tempe Southwest | 22,093,676 | 9.7% | 10.8% | 309,841 | 507,799 | 402,730 | $1.23 |
| Southeast | 130,332,016 | 13.3% | 14.5% | 897,456 | 2,905,562 | 2,060,979 | $1.31 |
| Submarket | Total Inventory (SF) | Direct Vacancy Rate | Total Vacancy Rate | 3Q26 Direct Net Absorption (SF) | SF Under Construction | 3Q26 Total Leasing Activity (SF) | Average Direct Rental Rate NNN |
|---|---|---|---|---|---|---|---|
| Goodyear | 40,481,118 | 11.8% | 11.8% | 232,773 | 2,211,162 | 454,573 | $1.01 |
| Southwest North of Buckeye Road | 38,150,585 | 10.4% | 11.5% | 531,331 | 437,694 | 440,577 | $0.98 |
| Southwest South of Buckeye Road | 20,716,074 | 9.4% | 9.7% | 10,213 | 0 | 344,548 | $1.06 |
| Tolleson | 50,065,211 | 6.8% | 8.7% | -591,444 | 1,275,500 | 497,576 | $0.86 |
| Southwest | 149,412,988 | 9.4% | 10.4% | 182,873 | 3,924,356 | 1,737,274 | $0.95 |
| Submarket | Total Inventory (SF) | Direct Vacancy Rate | Total Vacancy Rate | 3Q26 Direct Net Absorption (SF) | SF Under Construction | 3Q26 Total Leasing Activity (SF) | Average Direct Rental Rate NNN |
|---|---|---|---|---|---|---|---|
| Total | 469,852,893 | 10.3% | 11.5% | 2,854,020 | 14,029,434 | 7,563,943 | $1.18 |
| Submarket | Total Inventory (SF) | Direct Vacancy Rate | Total Vacancy Rate | 3Q26 Direct Net Absorption (SF) | SF Under Construction | 3Q26 Total Leasing Activity (SF) | Average Direct Rental Rate NNN |
|---|---|---|---|---|---|---|---|
| Manufacturing & Warehouse | 320,325,684 | 11.2% | 12.2% | 3,207,735 | 9,823,651 | 5,690,690 | $1.15 |
| General Industrial | 169,678,329 | 10.0% | 11.5% | 1,230,623 | 2,684,388 | 2,267,344 | $0.82 |
| Flex | 27,993,255 | 9.5% | 10.0% | -129,349 | 1,521,395 | 251,050 | $1.28 |
Significant Sale Transactions 3Q26
| Property | Submarket | SF | Sale Price | $/SF | Buyer | Seller |
|---|---|---|---|---|---|---|
| Park 303 Phase II | Glendale | 1,113,135 | $170,250,000 | $152.95 | Nuveen | Lincoln Property Co. |
| Airport Center – 3607 S 12th St | SC S of Salt River | 356,089 | $86,175,000 | $242.00 | IDI Logistics | Trammell Crow Co. & Clarion Ptnrs. |
| Park 91 | Tolleson | 278,825 | $71,500,000 | $256.43 | AEW Capital Management | Martens Development Co. |
| 91st Avenue Logistics Hub | Tolleson | 417,600 | $47,800,000 | $114.46 | INDUS Realty Trust | Nearon |
| 71 Roosevelt Park | Tolleson | 256,758 | $47,470,962 | $184.89 | NLF Misiac Portfolio, LLC | Forms + Surfaces |
Significant Lease Transactions 3Q26
| Property | Submarket | SF | Transaction Date | Landlord | Tenant | Lease Type |
|---|---|---|---|---|---|---|
| VT303 North – Bldg A | Glendale | 1,146,518 | August 2026 | VanTrust Real Estate, LLC | DHL | Direct |
| 17450 W Minnezona Ave – Bldg 1 | Glendale | 391,639 | August 2026 | Majestic Realty | nVent | Direct |
| 4275 N 97th Ave – Bldg B | Glendale | 317,077 | August 2026 | Clarion Partners & Creation Equity | Undisclosed | Direct |
| 150 N Litchfield Rd – Bldg A | Goodyear | 251,216 | September 2026 | Johnson Development Associates | Undisclosed | Direct |
| 4025 S Binary Rd – Bldg A | Chandler N/Gilbert | 204,337 | September 2026 | Dalfen Industrial | Brinkmann Co. | Direct |
Significant Under Construction
| Property | Address | Submarket | SF | Owner | Delivery |
|---|---|---|---|---|---|
| Northern Parkway Logistics Center | Reems Rd & Northern Pky | Glendale | 1,184,591 | Merit Partners | 4Q26 |
| VT303 North | 7842 N Reems Rd | Glendale | 1,146,518 | VanTrust Real Estate, LLC | 4Q26 |
| NorthPark Logistics Center | W Northern Pky & 147th Dr | Glendale | 1,140,584 | Lovett Industrial, LLC | 2Q27 |
| GO 99 North | SEC 99th Avenue & Buckeye Rd | Tolleson | 1,100,500 | GO Industrial | 2Q27 |
| Airpark Logistics Center | SEC Yuma & Bullard Ave | Goodyear | 828,480 | Prologis | 4Q27 |
Data as of Q3 2026. Source: CoStar, AZ Office of Economic Opportunity, PBJ. Prepared by the Kidder Mathews Research Group.
ContactGARY BARAGONA |
Related ContentYou may also be interested in our other research: all industrial market reports, Phoenix multifamily market report, Phoenix office market report, Phoenix retail market report, Phoenix office location. |