PHOENIX — Industrial space in the Phoenix metro area is now 8% empty, which is higher than the last four years, according to real estate analysts at Colliers.
According to the Colliers report, the two areas with the highest vacancies are the Northwest and Southeast Valley, both with above 10% vacancies.
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Why should you care about empty industrial buildings? Because industrial buildings that are bought or leased usually mean new jobs are being filled, but an empty industrial building doesn't employ anyone.
In east Mesa, Brinkmann Construction is building a new industrial building. Unlike some others in the area, this one already has a tenant.
"It's still out there, there's a demand," Joe Strobbe with Brinkmann Construction said. "It's just the demand has shifted to a different product."
Strobbe says spec buildings are taking longer to fill, they're still being occupied, but it's taking longer.
Most of his contracts are for companies that already know what they want and need their building to be custom-built.
"We're busy in different areas," Strobbe said. "Now we're busier with a smaller product that has tenants in tow."
There are unused buildings, experts say. And that's because there's more supply than current demand. But, they say, demand should catch up.
"I would say it's very healthy, but we do have space to work through," said Rusty Kennedy, with the real estate firm CBRE.
"The benefit is, when companies are looking to locate here, they have a space to go, " said Kennedy.
Currently, Kennedy said there's more delay between a building being finished than it being occupied. But a delay is normal, the building boom of the last few years just didn't have that lag, according to Kennedy.
"It's back to normal levels," he said.
The Colliers report says analysts expect the vacancy rate to go higher in the coming months as more buildings that were started in 2023 are finished.
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