— By Rob Martensen, Vice Chair, Colliers International —
What’s hot in Phoenix’s industrial market? This is a question we get asked a lot from developers and property owners looking to enter our region. The topic of conversation is mostly centered around the amount of space under construction in the Phoenix MSA and what parts of town are seeing the most activity. In the past, we had submarkets that would be more or less attractive, and we would steer clients in that direction. Today, however, the entire Phoenix metropolitan area is in play for tenants and owners.
Greater Phoenix has been fortunate to land several “whales,” large corporations that bring multiple suppliers with them. Naturally, the one most talked about is Taiwan Semiconductor Manufacturing Corporation (TSMC) in North Phoenix. TSMC took down nearly 1,600 acres of land to build a $12 billion chip making factory. The company has since announced it will immediately commence construction on Phase II of the project. Intel is another chip manufacturer that has had a presence in nearby Chandler, but is now under construction on a $20 billion expansion.
Both of these undertakings will continue to feed companies that move to Phoenix and support not only the construction of the project, but the ongoing needs of the factories after they begin chip production.
Third-party logistics (3PL) companies, for example, are storing equipment that will be installed in the factories. Once these projects are up and running, these 3PLs will then begin storing components to maintain the equipment. We are also seeing chemical suppliers and many other ongoing vendors.
TSMC will bring this activity to North Phoenix. Intel will usher it into Chandler, or the Southeast valley. In the West valley, we have several large corporate users that will be bringing suppliers with them, including Kore Battery, Nestle and Microsoft.
Other large users in the Southeast valley include LG, which will be manufacturing batteries, along with Meta and Google, which are under construction on large data centers. Additionally, DSV Air and Sea just closed on 86 acres for a 1.7-million-square-foot logistics center and regional corporate headquarters. Several solar panel manufacturing factories are also looking in the area.
These large corporations planting their flags in all different areas of Phoenix has created strong leasing activity in every submarket.
Now, when developers and investors inquire about which submarket is the most active, we can say “all of them!”