Market Intelligence: In Phoenix, Available Land and Usable Land Are Becoming Two Different Things

Location Decision spoke with newly named Alliance Industrial Southwest Managing Director Brady Maus who is entering the Phoenix market as industrial demand accelerates. He says infrastructure, especially power distribution, is narrowing the pool of sites that can support the region’s next wave of growth.

Phoenix still has land. What it increasingly lacks is actionable land — sites that can deliver the power, utilities and infrastructure required on a company’s schedule.

That distinction matters as logistics, semiconductor suppliers, data-center vendors, manufacturers and aerospace companies compete for many of the same sites.

For economic developers, the lesson is simple: a parcel is not truly competitive because it is available. It is competitive because it can be delivered.

For site selectors, the question is shifting from “Is there land?” to “When can this site actually operate?”

That may be one of the most important questions shaping Phoenix’s next industrial growth cycle.

From the air, Phoenix still looks like a market with room to grow.

There is land. There is demand. Developers are active. Major companies continue to invest.

But increasingly, the aerial view is misleading.

“There’s a lot of land in Phoenix,” said Brady Maus, the newly appointed managing director for the Southwest region at Alliance Industrial Company.

Once developers begin examining infrastructure and utility availability, however, “the amount of actionable sites is significantly smaller than what it looks like if you’re just looking at an aerial on a map.”

Maus, who previously spent five years with Trammell Crow, said the current level of activity in Phoenix is as aggressive as anything he saw during that period.

Capital interest is returning. Tenant decisions are moving. Developers are pursuing land again.

And after several years of uneven demand, Maus now sees opportunities emerging across more product types and more parts of the Valley.

The shift is especially clear in the large-box industrial market.

At one point, Maus said vacancy in large bulk buildings in the Southwest Valley climbed above 20%, even as smaller rear-load buildings remained extremely tight.

The market had nine million-square-foot buildings sitting vacant, with no obvious answer for how quickly they would be filled.

Then the tenants showed up.

Amazon took multiple facilities. Retailers followed. Third-party logistics companies entered the market.

Maus said those large vacancies have now effectively disappeared, while buildings under construction are also being absorbed and additional tenants remain in the market.

That matters because it suggests Phoenix has moved beyond being merely a fast-growing regional industrial market.

Asked whether the region has become a national logistics and manufacturing hub, Maus did not hesitate.

“Absolutely.”

The question now is whether the region can provide enough infrastructure-ready sites to support the demand it has created.

Industrial demand in the Valley is also becoming more diverse.

In the West Valley, Maus said Alliance is seeing requirements from heavy manufacturers, light manufacturers, distributors, storage users and companies that need significant outdoor space.

That means different types of industrial users increasingly compete for the same sites.

A parcel that appears destined for a million-square-foot distribution center may instead attract a manufacturer with specialized power or building requirements.

The constraint is often not acreage.

It is infrastructure.

Maus said some sites that appear ready for industrial development may still be two or three years away from receiving the utilities required for a project.

That creates an important distinction for economic developers.

Land inventory is not the same thing as site inventory.

A site can have the right zoning, highway access and acreage and still fail a project if utilities cannot arrive within the company’s timeline.

Asked whether water or electricity presents the bigger near-term challenge for industrial development, Maus pointed to power.

More specifically, he pointed to transmission and distribution.

“I don’t know if power generation is necessarily the issue for us right now,” he said. “But the transmission and distribution side of the ledger with utility companies is stressed, and we’re seeing it on every project that we pursue.”

Maus praised Arizona Public Service and Salt River Project as strong partners.

The issue, he said, is the pace of growth.

Infrastructure systems are trying to keep up with a market expanding faster than normal planning cycles anticipated.

For site selectors and economic developers, that changes the power conversation.

The question is no longer simply:

Is power available?

It is:

How much power is available? Where is it available? And when can it be delivered?

Those timelines can determine whether a site survives a project search.

Some of Phoenix’s most important industrial demand is also coming from companies that never make the megaproject headline.

Data centers are a prime example.

Over roughly the past two to three years, Maus said contractors, subcontractors, equipment suppliers, rack manufacturers and service companies supporting data centers have consumed substantial amounts of traditional industrial space.

By his estimate, data-center-related companies have been the largest source of industrial absorption in Phoenix during that period.

That creates a larger economic-development question:

What comes after the megaproject?

A multibillion-dollar investment may generate the headline.

But the longer-term opportunity can come from the ecosystem surrounding it — suppliers, contractors, maintenance companies, manufacturers and service providers that need their own facilities and workers.

TSMC may be the clearest example.

Maus said roughly 30 to 35 TSMC suppliers have already leased or purchased facilities in the Phoenix area.

And based on what he is hearing from economic-development contacts, the supplier ecosystem may still have significant room to grow.

“I don’t think that we have seen, or we have really even scratched the surface of what TSMC’s impact is going to be on the Phoenix industrial market long term yet,” Maus said.

He was careful not to repeat unverified rumors about specific proximity requirements for suppliers.

But the broader conclusion is difficult to miss: the semiconductor investment is creating industrial demand far beyond the fab itself.

Semiconductors and data centers dominate much of the discussion around Phoenix.

Maus believes aerospace and defense deserves more attention.

He pointed to Honeywell Aerospace, Luke Air Force Base, the region’s airport network and smaller aerospace-related companies that have steadily expanded their footprints.

Alliance has also seen increased tenant demand from the sector.

For Phoenix, that adds another layer to an increasingly diversified industrial economy.

Logistics is still important.

But it now overlaps with semiconductors, data centers, advanced manufacturing and aerospace and defense.

Those industries have different labor and facility requirements.

What they increasingly share is competition for the same fundamentals:

Land. Power. Infrastructure. Time.

Phoenix has already proved that it can generate demand. The next challenge is converting that demand into projects. That requires communities to answer harder questions earlier:

For economic developers, that may be the next competitive frontier.

Because in a market moving this quickly, the best site may not be the one with the most acreage or the lowest price.

It may simply be the one that can say, with certainty:

We can get you operating on time.