Phoenix Industrial Loans: Warehouse & Manufacturing Financing [2026 Guide]

Phoenix has cemented its position as one of the fastest-growing industrial markets in the United States, and for good reason. With TSMC's $165 billion semiconductor investment in north Phoenix, Intel's expanded Fab 52 campus in Chandler, and a surge of e-commerce fulfillment centers along the Loop 303 corridor, demand for industrial financing in the Valley of the Sun has never been stronger. Whether you are purchasing a warehouse near Sky Harbor Airport, building a logistics facility in Goodyear, or refinancing a manufacturing plant in Mesa Gateway, understanding your Phoenix industrial loan options is the first step toward capitalizing on this historic growth cycle.

Why Is Phoenix One of the Hottest Industrial Markets in the Country?

Greater Phoenix delivered 24.3 million square feet of new industrial space over the past year, with net absorption in Q3 2025 alone reaching 7.87 million square feet, nearly tripling the previous quarter. Full-year 2025 direct net absorption totaled 13.9 million square feet across the metro.

Several forces are driving this momentum. The semiconductor boom anchored by TSMC and Intel has attracted 39 semiconductor-related companies to the region, creating more than 7,700 direct jobs and over $37 billion in capital investment. Meanwhile, nearshoring from Mexico continues to push logistics and distribution operations northward into Arizona, taking advantage of the state's proximity to the border, major interstate highways (I-10 and I-17), and the Union Pacific rail network.

E-commerce fulfillment has been another catalyst. Third-party logistics (3PL) providers remain the dominant source of big-box warehouse demand in Phoenix, leasing millions of square feet along the Loop 303 corridor in Goodyear, Buckeye, and West Phoenix. The result is a market that, despite elevated new supply, continues to attract capital and tenants at a pace few metros can match.

What Types of Industrial Properties Can You Finance in Phoenix?

Phoenix's industrial market spans a wide range of property types, and lenders have programs tailored to each. Here are the most common industrial assets that borrowers finance across the Valley:

• Warehouse and distribution centers: The backbone of Phoenix industrial real estate, these range from small-bay facilities under 50,000 square feet near Sky Harbor to massive 500,000+ square foot fulfillment centers in the Southwest Valley.
• Manufacturing facilities: From semiconductor cleanrooms in Chandler to food-processing plants in Mesa, manufacturing properties often require specialized buildouts that affect loan structuring.
• Flex/industrial space: Popular in Gilbert, Chandler, and Tempe, these hybrid properties combine office and warehouse components and appeal to tech and light-industrial tenants.
• Cold storage and food logistics: Arizona's position as a distribution hub for produce and perishable goods entering from Mexico has driven demand for cold storage facilities.
• Truck terminals and logistics yards: Properties with heavy yard space and loading docks near major freeway interchanges command premium rents and attract strong lender interest.

What Are the Current Industrial Loan Rates in Phoenix?

As of early 2026, Phoenix industrial loan rates reflect a stabilizing interest rate environment following the Federal Reserve's rate cuts in late 2025. The fed funds rate sits at 3.50% to 3.75% after the January 2026 pause, and commercial mortgage rates have responded accordingly.

For stabilized industrial properties in Phoenix, conventional commercial mortgage rates start in the low-to-mid 5% range for well-qualified borrowers with strong properties. SBA 504 loans remain popular for owner-occupied warehouses and manufacturing facilities, offering below-market fixed rates on the CDC portion. Bridge loans for value-add industrial plays or properties in lease-up typically range from 7% to 10%, depending on leverage and property condition.

The key factors that determine your rate include property location (infill vs. suburban), occupancy, tenant credit quality, loan-to-value ratio, and borrower experience. Properties in tight submarkets like the Sky Harbor corridor (vacancy around 5.2%) or small-bay space under 100,000 square feet (vacancy at 4.1% to 5.6%) tend to receive the most competitive terms.

How Do Phoenix Industrial Submarkets Compare for Investors?

Not all Phoenix industrial submarkets are created equal. Each area offers distinct advantages depending on your investment strategy, property type, and tenant base. Understanding these differences is critical for both financing and long-term returns.

Sky Harbor/Airport Area: This infill submarket maintains the tightest vacancy in the metro at approximately 5.2%. Proximity to the airport and downtown Phoenix makes it ideal for last-mile delivery and light manufacturing. Rents here are among the highest in the Valley, and lenders favor the strong fundamentals.

West Valley/Loop 303 Corridor (Goodyear, Buckeye): This is where the bulk of new large-format development is concentrated. The Loop 303 Manufacturing Corridor features master-planned business parks like PV303, with Class A buildings ranging from 100,000 to over 1 million square feet. The area benefits from direct I-10 access and proximity to California markets.

Chandler/Gilbert: Intel's Ocotillo campus and the broader semiconductor supply chain anchor this East Valley submarket. Demand for flex and advanced manufacturing space is strong, and the educated workforce from Arizona State University's Polytechnic campus supports tech-oriented tenants.

Mesa Gateway: Anchored by Phoenix-Mesa Gateway Airport, this 35-square-mile aerotropolis has grown 256% over the past five years. The submarket now has 27.5 million square feet of industrial product with another 2.9 million under construction. Aerospace, defense, and advanced manufacturing tenants are the primary drivers.

What Loan Programs Are Available for Phoenix Industrial Properties?

Borrowers purchasing or refinancing industrial properties in Phoenix have access to several loan programs, each designed for different scenarios. Here is a breakdown of the most common options:

Conventional Commercial Mortgages: These are the standard choice for stabilized, income-producing industrial properties. Expect terms of 5 to 10 years with 25-year amortization, LTVs up to 75%, and rates starting in the low 5% range. Lenders focus heavily on the debt service coverage ratio (DSCR) to ensure the property's income comfortably covers mortgage payments.

SBA 504 Loans: Ideal for owner-occupants purchasing or expanding a warehouse or manufacturing facility. The SBA 504 program offers up to 90% financing with a below-market fixed rate on the CDC second mortgage. This program is particularly popular with small manufacturers and distribution companies expanding into new Phoenix-area facilities.

Bridge Loans: If you are acquiring a vacant or below-market-occupancy industrial property, a bridge loan provides short-term capital (typically 12 to 36 months) while you stabilize the asset through lease-up or renovation. These are common for value-add warehouse deals in the West Valley where new spec buildings need time to attract tenants.

CMBS Loans: For larger industrial portfolios or single-asset deals above $5 million, conduit (CMBS) loans offer competitive fixed rates with terms up to 10 years. These are non-recourse, which is attractive for investors looking to limit personal liability.

Construction Loans: With millions of square feet of new industrial development underway, construction financing is a major component of Phoenix's lending landscape. These loans fund the ground-up build and typically convert to permanent financing upon project completion and stabilization.

What Is the DSCR Requirement for Phoenix Industrial Loans?

The debt service coverage ratio is one of the most important metrics lenders evaluate when underwriting a Phoenix industrial loan. DSCR measures the property's net operating income relative to its annual debt service (mortgage payments). A DSCR of 1.25x means the property generates 25% more income than needed to cover the mortgage.

For Phoenix industrial properties, most lenders require a minimum DSCR of 1.20x to 1.25x for conventional loans. SBA loans may accept slightly lower ratios, while bridge lenders focus more on the projected stabilized DSCR rather than current income.

To calculate your DSCR, divide the property's annual net operating income by the annual mortgage payment. For example, a warehouse near Goodyear with $500,000 in net operating income and $400,000 in annual debt service has a DSCR of 1.25x. You can run your own numbers using our DSCR calculator or our commercial mortgage calculator to estimate payments based on current rates.

How Does the TSMC and Semiconductor Boom Affect Industrial Lending in Phoenix?

TSMC's expansion in north Phoenix is not just a story about chip manufacturing. It is reshaping the entire industrial ecosystem across the Valley. With $165 billion pledged, a six-fab gigafab cluster planned, two advanced packaging facilities, and a research and development center on the way, the ripple effects on warehouse and logistics demand are substantial.

The TSMC complex is projected to create 12,000 high-tech jobs directly, with tens of thousands more in supplier and support roles. This drives demand for everything from chemical storage facilities and cleanroom-adjacent warehouses to employee housing and retail centers.

Intel's Chandler campus adds to this dynamic. Fab 52 is now operational, producing the company's most advanced 18A process chips, and a sixth fab (Fab 62) is expected around 2028. Together, TSMC and Intel have positioned Arizona as the leading domestic semiconductor manufacturing hub, with over 60 industry expansions since 2020.

For industrial lenders, this concentration of advanced manufacturing investment translates into strong tenant demand, stable rents, and durable long-term fundamentals, all factors that support more favorable loan terms for borrowers in the Phoenix market.

What Should You Know About Phoenix Industrial Rents and Vacancy Trends?

Phoenix industrial rents have stabilized after three years of significant growth. As of Q4 2025, direct average asking rates for spaces 10,000 square feet and above reached $1.19 per square foot NNN per month, up 6% from $1.13 the prior year. On an annual basis, that translates to roughly $14.28 per square foot NNN before operating expenses.

Most Phoenix industrial leases are structured as triple-net (NNN), meaning tenants pay base rent plus their proportional share of property taxes, insurance, and common area maintenance. Budget an additional $3 to $5 per square foot annually for these pass-through expenses.

Overall vacancy across Greater Phoenix stands at approximately 12.4%, driven primarily by elevated supply deliveries. However, this headline number masks significant variation by property size. Big-box space over 100,000 square feet has a vacancy rate exceeding 16%, a 15-year high. In contrast, small-bay industrial space under 100,000 square feet maintains a much tighter vacancy of 4.1% to 5.6%.

This bifurcation matters for lenders. Borrowers financing smaller, infill industrial properties in established submarkets will generally receive more favorable underwriting than those pursuing large speculative warehouse deals in outlying areas.

What Is the Step-by-Step Process for Getting a Phoenix Industrial Loan?

Securing financing for a Phoenix industrial property follows a structured process. While timelines vary by loan type, most transactions follow these steps:

The timeline for a conventional commercial mortgage is typically 45 to 60 days from application to closing. SBA 504 loans may take 60 to 90 days due to the dual-approval process. Bridge loans can close in as few as 14 to 21 days when speed is critical for a competitive acquisition.

Working with a lender who understands the Phoenix industrial market, including submarket dynamics, tenant credit analysis, and environmental considerations specific to Arizona industrial properties, can significantly streamline the process and improve your terms.

How Can Nearshoring and Cross-Border Trade Benefit Phoenix Industrial Investors?

Arizona's 389-mile border with Mexico positions Phoenix as a critical node in the nearshoring trend that has accelerated since 2020. As manufacturers diversify supply chains away from Asia, Mexico has emerged as a top destination for production, and Phoenix serves as the natural U.S. distribution hub for goods moving northward.

The Port of Nogales handles billions of dollars in produce and manufactured goods annually, with much of that cargo flowing through warehouses in the Tucson-to-Phoenix corridor before distribution across the western United States. Cross-border trade with the Sonora, Mexico manufacturing region continues to grow, particularly in automotive parts, electronics, and consumer goods.

For industrial borrowers, this means steady tenant demand from logistics companies, freight forwarders, and 3PL providers who need Phoenix-area warehouse space to sort, stage, and distribute cross-border goods. Lenders view this trade-driven demand favorably because it is supported by structural economic trends rather than cyclical factors.

Frequently Asked Questions About Phoenix Industrial Loans

What is the minimum down payment for a Phoenix industrial loan?

Most conventional commercial mortgages require 25% to 30% down, resulting in a 70% to 75% loan-to-value ratio. SBA 504 loans allow as little as 10% down for owner-occupied industrial properties, making them an attractive option for businesses purchasing their own warehouse or manufacturing facility. Bridge loans typically require 20% to 35% equity depending on the property's condition and business plan.

Can I finance a vacant industrial building in Phoenix?

Yes, but your options will be different from a fully leased property. Vacant or below-market-occupancy industrial buildings are best suited for bridge loan programs that underwrite to the property's stabilized value rather than current income. Once you lease the space and achieve a stabilized DSCR, you can refinance into a lower-rate permanent loan.

How do environmental concerns affect industrial lending in Arizona?

Phase I Environmental Site Assessments (ESAs) are required for virtually all commercial loans. In Phoenix, specific concerns include former agricultural chemical use (common in converted farmland areas like Goodyear and Buckeye), underground storage tanks, and proximity to Superfund sites. If a Phase I identifies potential contamination, a Phase II assessment with soil and groundwater testing may be required before the lender will proceed.

What industrial property sizes are easiest to finance in Phoenix?

Small to mid-size industrial properties between 10,000 and 100,000 square feet are generally the easiest to finance in the current market. These properties benefit from significantly lower vacancy rates (4.1% to 5.6% compared to 16%+ for large-box space) and appeal to a broader tenant base. Lenders are more cautious with speculative big-box warehouses over 200,000 square feet, particularly in submarkets with elevated vacancy.

Do I need a personal guarantee for a Phoenix industrial loan?

Most conventional and SBA loans require a personal guarantee from borrowers with 20% or more ownership in the borrowing entity. CMBS (conduit) loans are the primary exception, offering non-recourse terms where the borrower's personal assets are generally protected. Non-recourse options typically require stronger properties, lower leverage, and more borrower experience.

How long does it take to close a Phoenix industrial loan?

Timelines vary by loan type. Bridge loans can close in 14 to 21 days for straightforward transactions. Conventional commercial mortgages typically take 45 to 60 days. SBA 504 loans require 60 to 90 days due to the dual-lender structure. Construction loans may take 60 to 120 days depending on project complexity and permitting status.

Ready to Finance Your Phoenix Industrial Property?

Phoenix's industrial market offers compelling opportunities for investors and owner-occupants alike, from small-bay warehouses in tight infill submarkets to large-format distribution centers along the Loop 303 corridor. With semiconductor giants investing hundreds of billions, nearshoring driving cross-border logistics demand, and the Valley's population growth showing no signs of slowing, the fundamentals supporting industrial real estate in Greater Phoenix remain strong heading into 2026.

Whether you are acquiring your first warehouse, expanding a manufacturing operation, or building a portfolio of industrial assets across the Valley, securing the right financing is essential. Contact our team to discuss your Phoenix industrial loan options and get a customized rate quote for your specific property and investment goals.