Top 5 Western Markets for Industrial Construction
The Western U.S. is a thriving hub for industrial construction, hosting several markets with growing economies. As of November, CommercialEdge data revealed that a total of 77.4 million square feet of industrial space was under construction in the region, representing 15.3 percent of the nation’s total industrial stock. The construction activity spans various sectors, including logistics, distribution, manufacturing and petrochemicals. Notable markets driving this surge include the bustling economy of Phoenix, the strategic transportation hub of Las Vegas and Denver, which stands out for its appeal to investors.
The table below utilizes CommercialEdge data and highlights the top five markets experiencing significant construction activity in the Western region. As of November, these markets’ active pipeline featured 74.8 million square feet of industrial space, constituting 96.6 percent of the region’s active pipeline at said time.
1. Phoenix
The Phoenix industrial market is thriving, driven by a growing economy, population influx and the escalating demands of e-commerce. Business-friendly policies and regulatory support have attracted companies, leading to a surge in construction activity. Meanwhile, the significant increase in the development of advanced industrial facilities showcases the metro’s adaptability to evolving market demands.
A total of 47.6 million square feet of industrial space was under construction in the metro as of the end of November encompassing 179 projects or 12.6 percent of total stock, CommercialEdge data shows.
Furthermore, the market witnessed a substantial year-to-date increase, with close to 28.6 million square feet of industrial space coming online. This accounted for a 28.9 percent rise compared to the same period in 2022, when approximately 22.2 million square feet of industrial space was added to the metro’s total inventory.
2. Las Vegas
Las Vegas’s strategic location as a transportation hub and its proximity to major markets, including the West Coast, can make it an attractive location for companies looking to establish distribution and logistics operations. This has fueled a significant surge in industrial construction; Some 12.6 million square feet across 45 projects was underway in the metro as of November, representing 10.0 percent of the total inventory.
Between November 2022 and November 2023, industrial deliveries surged to 7.3 million square feet, marking a 6.2 percent increase compared to the 6.8 million square feet completed in the corresponding period of 2022. This substantial rise underscores the growing demand for industrial spaces within that timeframe.
3. Denver
Denver has become a focal point for significant investor interest in the industrial sector, as real estate continues to be viewed as a stable and attractive asset class. This heightened investor confidence has translated into a surge of development projects across the metro.
As of November, Denver’s active pipeline featured 24 projects totaling 9.7 million square feet of industrial space, accounting for 3.7 percent of total stock. According to CommercialEdge data, another 5 million square feet was added to the market’s total inventory year-to-date in November 2023. This represents a 12.1 percent decrease from the same timeframe in 2022, when 5.7 million square feet had come online.
4. Salt Lake City
With the surge in online shopping from a growing population, the demand for distribution and e-commerce space is on the rise, and Salt Lake City’s industrial market is well-positioned to meet this demand. The market’s resilience can be attributed to the influx of companies from California seeking affordable real estate opportunities, a skilled workforce and strategic proximity to population centers.
Close to 3.1 million square feet of industrial space was underway in the metro as of November 2023, accounting for 1.4 percent of total stock. At the same time, industrial deliveries year-to-date in November 2023 amounted to 5.1 million square feet. This reflects a substantial 53.5 percent decrease from the same period in 2022, where the total amounted to approximately 11 million square feet.
5. Reno
Reno stands out as a thriving industrial market, housing top-notch warehouses, distribution, fulfillment and manufacturing facilities. Its strategic location near California, the West Coast and key transportation hubs—including rail and air connectivity through Reno-Tahoe International Airport—positions the metro as an ideal choice for businesses seeking efficient supply chain logistics and a well-connected industrial environment.
Developers stayed active in the metro, leading to 1.8 million square feet of industrial space under construction as of November, or 1.8 percent of total stock. At the same time, industrial deliveries year-to-date in November 2023 amounted to nearly 3.4 million square feet, mirroring the total recorded during the same time in 2022, a little over 3.4 million square feet.
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