Positive net absorption, continuing expansion by
key players, strong pre-leasing and lower construction starts
drive positive outlook
PHOENIX, June 19,
2024 /PRNewswire/ -- Thompson Thrift, a full-service
nationally recognized real estate company engaged in industrial,
commercial, multifamily, mixed-use and retail projects across the
country, shared insights on the current state of the Phoenix industrial market and why they feel
notable plans for near-term investment demonstrate a promising
outlook for the future of the market.
"While national industrial numbers continue to show a cool down
after record growth coming out of the pandemic, Phoenix's diversified economy, affordability
relative to other larger cities in the Southwest and
business-friendly regulation have allowed it to remain one of the
strongest markets for population and job growth and one of the
top-performing industrial markets in the nation," said Ashlee Boyd, managing partner for Thompson
Thrift Commercial.
Positive net absorption and large-scale
deliveries
During the first quarter the
Phoenix market had 4.5 million
square feet of net absorption, representing a double-digit increase
over 2023. New deliveries reached nearly 12 million square feet
with 57 buildings.
Strong leasing activity and notable expansion
plans
Some of the world's most recognized companies
continue to locate and/or expand their footprints in the
Phoenix area. Notable examples
include:
- Amazon executed three individual leases with over 1 million
square feet each during the first quarter—the last time there were
three transactions of that size in the same quarter was in
2013.
- Taiwan Semiconductor
Manufacturing Company (TSMC) is tripling down on its commitment to
Arizona. The chipmaker announced
it will build a third facility at its North Phoenix semiconductor plant, increasing
its investment to $65 billion.
- Intel, the world's second-largest producer of semiconductor
chips, is underway on a $20 billion
expansion at its Chandler campus, building two new facilities
alongside its four existing ones.
- LG Energy Solution is underway with a $5.5 billion battery manufacturing complex near
Germann Commerce Center in Queen
Creek that is expected to create 4,000 new jobs and will
propel them to be Queen Creek's
largest employer.
Andrew Imel, vice president of
industrial for Thompson Thrift stated, "Not only will these
expansions from global corporations bring more jobs on their own,
but economic development officials indicate that dozens of
additional businesses that support and supply these companies will
also increase their presence in the Phoenix Valley."
Lower construction starts and healthy pre-leasing should
aid rent growth
While recent speculative deliveries are
expected to impact occupancy and asking rents in the short-term,
Thompson Thrift believes that a reduction in construction starts
and strong pre-leasing activity should tighten vacancy rates in the
foreseeable future and accelerate rent growth.
The first phase of Elliot Tech Center, the company's
mixed-use project in Mesa's highly-acclaimed Elliot Road Technology
Corridor, is more than 30% pre-leased—outpacing the 21% Q1
preleasing stats for the overall Phoenix industrial market. Bombard Electric,
Avanti Windows and Prestige
Protective Coatings are completing build-outs of their new spaces;
retail tenants Black Rock Coffee, Circle K and Oregano's Pizza
Bistro have opened; and the remaining two buildings are in
lease-up. The company also is preparing to move forward with a
second phase that will add another 622,000 square feet of
industrial space spread across five buildings, three of which
Thompson Thrift expects will be build-to-suits.
Thompson Thrift is also under construction on approximately
400,000 square feet of light industrial space in the first phase of
Germann Commerce Center, located just west of the southwest
corner of Germann Road and Meridian Road in the Queen Creek suburb. Since the announcement of
LG Energy Solution, the leasing team has been working closely with
Queen Creek Economic Development and Greater Phoenix Economic
Council identifying users directly related to the $5.5 billion battery manufacturing facility. Upon
completion of the multi-phase development, Thompson Thrift expects
to have just under 1.1 million square feet of speculative and
build-to-suit space between 13 buildings ranging from 62,000 to
110,000 square feet each.
"With easy access to the Phoenix-Mesa Gateway airport, Loop 202,
and State Road 24, Germann Commerce Center is well-positioned to
take advantage of the many benefits of the area, including its
skilled workforce, strong industrial demand and proximity to
residential housing," said Imel.
Thompson Thrift is a full-service real estate development
company focused on ground-up commercial and mixed-use development
across the Midwest, Southeast and Southwest. Thompson Thrift is
well-established throughout Arizona with more than 20 industrial, retail
and multifamily projects in development, with an estimated volume
of more than $1.5 billion.
Since its founding nearly 40 years ago, Thompson Thrift has
invested more than $5 billion into
local communities and has become known as a trusted partner
committed to developing high-quality, attractive commercial and
multifamily communities.
About Thompson Thrift Real Estate Company
Thompson
Thrift is an integrated full-service real estate company with
offices in Indianapolis and
Terre Haute, Indiana; Denver; Houston and Phoenix. Three business units drive Thompson
Thrift's success—Thompson Thrift Residential which is focused on
upscale Class A multifamily communities and luxury leased homes,
Thompson Thrift Commercial which is focused on ground-up commercial
development, and Thompson Thrift Construction, a full-service
construction company. Through these business units, Thompson Thrift
is engaged in all aspects of development, construction, leasing,
and management of quality commercial real estate projects across
the country. The company earned national recognition as a winner of
a 2024 Top Workplaces USA award,
the latest accolade that reflects the company's ongoing commitment
to excellence in the community and workplace. For more information,
please visit www.thompsonthrift.com
Contact:
Jennifer
Franklin
Spotlight Marketing Communications
949.427.1385
jennifer@spotlightmarcom.com
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SOURCE Thompson Thrift