The keynote speaker, Wayne Stutzer, did a great job discussing the macro-economic impact of what is happening in simple terms. I have heard Wayne a numerous occasions and his ability to entertain as well as be insightful is one of the best. The biggest takeaway I had was when he discussed America’s competitiveness in the future and how we need to have our kids today focus on S.T.E.M. – Science, Technology, Engineering, and Mathematics.
After Wayne had us all thinking about the big picture, the Industrial Panel followed. When looking at the Phoenix Market, rental rates should remain unchanged over the next 12 months. Vacancy is about 12% across the Valley. The struggling section in the industrial market is the small bay user. One concern that was brought up by a panelist was industrial/manufacturing requires potentially enormous amounts of water. Another panelist made a stated that Arizona Department of Water Resources said that we are using the same amount of water as we did in 1950 when the population was 4.5 times less than today because of all of the water conservation efforts.
One panelist always likes to view the industrial market as a 3 legged stool and that when all 3 legs are up, Phoenix will be up. Those legs are: 1) Real Job Growth, 2) Real Demographic Growth, 3) a Real Easing of Credit.
The biggest issues for industrial users today are twofold, Labor and Property Taxes. They are the top two issues that continually are a concern for our industrial users.
Regarding this market being a Tenant or Landlord market, the consensus was it is still a Tenant market but it is rapidly swinging toward Landlord and will be fully Landlord by 2015.