The Metro Phoenix job market continued to show signs of improvement, adding 44,900 jobs year-over-year through
August 2015. During the same time period, the unemployment rate decreased 60 basis points (bps) to
5.8%. The industrial sector accounted for 11,000 of the 44,900 new jobs added over the past year.

As Q3 2015 closed, industrial vacancy in Metro Phoenix stood at 11.1%. This equates to a slight decrease from last quarter and one year prior, both of which closed at 11.2%. The Scottsdale (10.2%) submarket recorded the largest decline in vacancy, with this metric falling 80 bps from the previous quarter.

Of the nearly 4.0 million square feet (msf) of new deliveries this year, 46% were delivered vacant. This quarter alone, nearly 363,000 sf of premium warehouse/distribution space came online, with only 29.4% preleased. There  is currently 4.2 msf of new construction in the pipeline, of which 2.3 msf is set to deliver next quarter and 74% of that is preleased or build-to-suit (BTS).

Demand echoed the subtle change in vacancy with 822,000 sf of net absorption throughout the Metro Phoenix market. The average asking rate in stands at $0.51 per square foot (psf) on a monthly triple net basis.