Changing the landscape: Semiconductor industry boosts industrial growth in Deer Valley, Phoenix region - Phoenix Business Journal

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As a result of its growth in the past three years, the Valley is now ranked among the country's industrial hub heavyweights. phoenix

Land and labor shortages a concern

When selecting a site, Bob Hess, vice chairman of global strategy for Newmark Inc. and member of the Site Selectors Guild, said suppliers also look for engineering talent, technical skills, electric power, water or office space and amenities. Sometimes, they're also looking at sites with a regional reach to their customers, which could make it harder for Arizona to compete with other Western states.

Cushman & Wakefield research shows that about a dozen or more industrial companies have signed leases or acquired land sinceSome companies have also been moving out of more expensive and limited submarkets such as Scottsdale and relocating to north Phoenix. The asking rents have increased by about 75% in the past two years, which has also impacted sale prices of the buildings, said Trevor McKendry, an executive vice president at DAUM. Even though about 750,000 square feet was under construction, the second quarter had negative absorption of 229,226 square feet, or the space leased minus what became vacant. Pompay said the negative absorption is due to old back-office or specialized buildings being converted to industrial use.

Historically, the Deer Valley market was mostly driven by geography and an abundance of industrial-zoned land around the airport, Pompay said. Cities like Peoria and Scottsdale also didn’t have as much industrial development, so users migrated east or west to Deer Valley.

 

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