February 7, 2013

Trbo’s Market Report – Indusrtial Strength in 2013

Craig Trbovich Commercial Real Estate –

As I reported last month in my 2012 Market Summary, the industrial and office markets in Phoenix finished 2012 with strong 4th quarters, and the industrial market also showed impressive year over year results.  Now that the January results are in for 2013, it is interesting to see what has been trending in the two markets early in the first quarter, based on CoStar Analytics.

According to the chart below, the industrial market has continued to show strength and solid activity, while the office market has backed off of its record-setting pace set in the 4th quarter.  I have seen similar results in my own brokerage activities.   For example, Industrial property investments have a lot of interest and activity, especially in the multi-tenant warehouse income properties under $10 million.  And while office activity is still better than it was a year ago, many income properties continue to struggle with high vacancy and having to offer aggressive lease terms to attract tenants.

As we move forward in 2013, I expect the strength of the industrial market will continue, while the office market will also continue to improve, but more slowly until we see significant improvements in the employment numbers.  I also expect we will start to see industrial lease rates starting to trend upwards and new development in the industrial warehouse sector as the market continues to show solid results.  The sound of increasing lease rates will be a sweet song for industrial investors and developers.  So stay tuned for future updates.  And for a no obligation analysis of your property, please call me at (408) 522-2799 to “TrboCharge” your investment real estate today.

Phoenix Office

Jan 2013

2012 Q4

Lease vacancy rate



Lease SF net absorption




Phoenix Industrial

Jan 2013

2012 Q4

Lease vacancy rate (flex)



Lease SF net absorption (flex)



Lease vacancy rate (warehouse)



Lease SF net absorption (warehouse)





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