Strong leasing activity continued into the second quarter in the Phoenix metro industrial market, which is on pace to surpass a record-breaking 2021, according to real estate experts.

During the second quarter, about 6 to 7 million square feet of space was absorbed in the Valley. Absorption is defined as the space leased minus what became vacant, which was mostly warehouse or distribution space.

Because of tenant demand, industrial vacancy has also continued dropping this year, reaching a record-low 2.8%, CBRE Group Inc. data shows. Some of the most notable deals announced in Q2 include Puma's 1 million-square-foot lease, WinSupply and PepsiCo's 600,000-square-foot lease and U.S. Merchant's acquisition of a 637,040-square-foot facility in Glendale, among others.

"The general tone of what we're seeing is leasing activity is showing no signs of slowing down at all," Cooper Fratt, senior vice president with CBRE, told the Business Journal. "It was a very strong quarter and seems to be remaining very active. A lot of companies still moving here."

Leasing activity in the second quarter was mostly driven by the construction, machinery and materials industries due to the local housing market, as well as retailers, which accounted for nearly 30% of leasing demand in Q2 thanks to "unwavering" consumer spending, according to a JLL market report.