The small-medium industrial bay leasing market has had a strong and steady Q1, mostly impacted by the housing market, distribution market, and mining industry. As the housing market continues to stay hot, contractors continue to stay busy and expand, fueling the small-medium bay demand.
The Northwest market continues to be the most expensive market as most service/trades businesses want to be close to the expanding markets (Marana, Oro Valley) and I-10.
We can expect lease rates to climb until the vacancy loosens up which will not happen until the housing market development starts to cool off. Medium bay leasing is also a very strong sector of the market mostly due to the demand for increased distribution and storage of building materials.
We can expect to see more industrial development occur where vacant industrial land permits as build to suits become more popular for last mile distribution.
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Max Fisher, Industrial Properties Broker