Issue 2, 2021 by Commercial Executive Magazine

THE NEW AGE OF INDUSTRIAL C E M -A Z .C O M • I S S U E 2 , 2 0 2 1

2001-2021

Celebrating twenty years of developing the Valley

YESTERDAY. TODAY. TOMORROW. lpcdesertwest.com

N LIFE..... It’s all about the PEOPLE!! We never take for granted the relationships we have built over the years!

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IN THIS ISSUE

Bob Mulhern: Reaching Higher Industry leader Bob Mulhern gets personal in this exclusive feature

16 Broker Team of the Month Jeff Hays and Tate Gunning are standouts in the industrial market

33 Resiliency in Real Estate Especially through turbulent times, Arizona’s self-storage industry is thriving

Perfect Partnership Amy Malloy and Heather Personne with Evolve Ventures are an outstanding duo

10 Cover Story Four heavy hitters are paving the way for the future of industrial in the Valley

28 Industrial to Watch Four companies discuss industrial trends and projects to watch for

38 © MPmedia, LLC 2021

Letter From The Publisher

– James Cash Penney

aying homage to one of my favorite covers, Commercial Executive Magazine’s “The Great Industrial Age,” this issue has a similar theme. It was five years ago that I had eight frontrunners in industrial real estate together for this classic cover photo. What made that issue so special was the timing – the commercial real estate industry in Phoenix had recovered from the Great Recession and the market was looking up. Enter 2021. Similarly, our post-pandemic world is recovering, and the industrial market is booming. There is no questioning that the industrial sector is having a moment right now. Referred to as “the darling of commercial real estate” and “virtually pandemic-proof,” industrial has taken the spotlight locally and nationally. This issue of CEM features four movers and shakers who are making waves in the industrial market. Andrew Geier, Cathy Thuringer, David Krumwiede and Rick Butler share their predictions, projects and excitement for what’s next in the Valley. Our Broker Team of the Month features industrial brokers Jeff Hays and Tate Gunning with Commercial Properties, Inc. Other informative features include Bob Mulhern: Reaching Higher, Industrial to Watch, Perfect Partnership and Resiliency in Real Estate: Self-Storage. The team at CEM is looking forward to a strong 2021. Our website has been modernized to provide our readers access to quality content. To get in touch with CEM regarding general inquiries or digital advertising opportunities, contact Karen Gallagher. We welcome unique editorial ideas. To be considered, contact Celina Busse for editorial. Enjoy the issue,

Mandy Purcell

Founder & Publisher Commercial Executive Magazine "The Great Industrial Age," 2016, featuring Tony Lydon, John DiVall, Kyle Westfall, Jim Wentworth, Don MacWilliam, Leroy Breinholt, Keith Earnest, Kevin Czerwinski. © MPmedia, LLC 2021

Leon Polk Smith HIDING IN PLAIN SIGHT FEBRUARY 5 - MAY 25, 2021 An original Heard Museum exhibition exploring the influence of Indigenous creative expression on the work of this American master of modern art. 2301 N. CENTRAL AVE. PHOENIX, AZ 85004 • 602.252.8344 Constellation Happy Day, 1971, acrylic on canvas, 80½ x 77 x 1 inches

This advertisement is generously sponsored by Desert Investment Management. Thank you for helping the Heard Museum support American Indian art in Arizona.

Team Karen Gallagher

Celina Busse

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celina@mpmediaaz.com

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Karen coordinates the many moving parts of Commercial Executive Magazine. Specializing in strategic planning, she ensures CEM’s readers and advertisers are happy. Contact Karen for information on advertising and general inquiries.

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Celina keeps our readers up to date on the latest and greatest commercial real estate news in the Valley. She organizes and coordinates each editorial piece to perfection. Contact Celina for questions regarding editorial, copyright or purchasing commemorative plaques and PDFs.

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PERFECT Partnership Amy Malloy & Heather Personne Evolve Ventures

In March 2019, one year prior to the pandemic shutdowns, entrepreneurs Heather Personne and Amy Malloy started Evolve Ventures. “It is hard to believe it has been two years for our company,” says Personne. “Time has flown by, but our partnership feels like such a permanent fixture,” Malloy says.

STARTING POINTS

According to the most recent statistics from the National Association of Women Business Owners, “More than 11.6 million firms are owned by women, employing nearly 9 million people, and generating $1.7 trillion in sales.” Managing Partners Malloy and Personne have embraced the opportunity to build one of the Valley’s premier commercial real estate firms. “Evolve is focused on real estate development and advisory throughout Arizona and the Southwest,” says Malloy. “We really wanted to make sure that we would be providing a service that was needed and that we could find a way to start our own development projects,” says Personne. “We had wonderful development partners who gave us great advice and supported us out of the gate.”

BACKGROUND

In their respective 25- and 15-year careers in CRE, Personne and Malloy share one commonality: Evergreen Devco. “I was a principal there during part of my tenure from 19952015,” Personne says. “Interestingly though, I did not arrive at Evergreen until 2016,” says Malloy. And both took their own track before joining forces at Evolve. “Subsequent to

Evergreen, I worked at ViaWest Group and Point B,” says Personne. “I spent 10 years at Macerich before arriving at Evergreen, and then some time at Pederson Group prior to teaming with Heather at Evolve,” Malloy says.

EVOLVE

Two years in, Evolve is gaining momentum with a pipeline of development and consultancy projects in retail, residential, health care, office, land planning, mixed-use and multifamily, according to the company’s website. “When we launched Evolve, we focused first on creating a successful advisory practice with a goal to begin pursuing our own retail and multifamily development projects within the first few years,” says Personne. “In 2020, we saw a need to move more quickly and to focus more specifically on multifamily in the near term. We were fortunate to team up with some fantastic partners to kick things off,” Malloy says.

APPROACH

Successful teams depend on a great mix of competencies and capabilities, and Personne and Malloy bring a diverse set of talents to their operation. “When we first began talking about © MPmedia, LLC 2021

Amy Malloy, Heather Personne

starting Evolve, we were a bit worried that we had too much overlap in our skill sets. What we found, however, is that we complement each other very well,” says Personne. “Given her background in the public sector, Amy tends to gravitate more toward the public process and adds value with her exceptional consensus-building skills, while I focus more on the analytical components of our projects.”

PARTNERSHIP

Mutual respect, hard work and a belief in each other define the Malloy and Personne partnership. “Early on, a mentor told us something very profound: Like a good marriage, a good work partnership should be more important and sacred than the two of us individually. I respect Heather and value her opinion, she is a true professional,” says Malloy. “Throughout this past two years, Amy and I have been building a business and also a trusted friendship. I consider Amy to be a confidante and am so grateful to have her as a sounding board,” says Personne.

PERSONAL

The pandemic has blurred the lines between work and family, and both women have adapted well to the challenges © MPmedia, LLC 2021

of parenting and growing their firm. “My husband and I have three children, and Amy and her husband two,” says Personne. “Since we work from home a lot, now more than ever, the workday is never really done. Owning your own company makes that even more true. Finding the time and mental head space to push everything over the goal line while juggling family commitments is a daily challenge,” says Malloy. As for time away from the office, “I love getting outside − hiking, skiing, kayaking – and can usually be found planning some sort of crazy trip. I am trying to coerce Amy into doing a rim-to-rim Grand Canyon hike with me this fall,” says Personne. “Amy is the most generous person I know, always hosting parties and events for her friends and family.”

FUTURE

As year three begins for Evolve Ventures, Malloy and Personne can look back on their accomplishments, as well as look ahead to a prosperous business future. “This has been an incredibly rewarding and fulfilling journey,” says Personne. “I cannot imagine not always being a part of Evolve Ventures,” Malloy says.

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777 Tower at NOVUS

2021 RED Awards Winner Tempe, AZ

DAVIS HAS DESIGNED THE MOST VALUABLE OFFICE AND MIXEDUSE PROPERTIES IN METROPOLITAN PHOENIX.

www.thedavisexperience.com

Matt Winquist / Winquist Photography

We don’t just see bricks and mortar. We see space to thrive and grow. At Colliers in Arizona, we are committed to investing in the growth of every team member in the organization to become the best version of themself. The collaborative culture Bob Mulhern has created not only encourages individual growth but motivates success. Bob supports and champions the unique style, strengths and dreams of each individual. Bob guides his brokers and staff to expand their possibilities and see what could be.

colliers.com/arizona Bob Mulhern Senior Managing Director

Accelerating success.

BOB MULHERN R

Orbiting the Sun 1 million miles above the Earth, the James Webb Space Telescope (“100 more times powerful than the Hubble lens,” according to the National Aeronautics and Space Administration) observes deep into the cosmos, to the horizon of 13.5 billion years ago. “The amazing capabilities of the telescope only function properly if all its pieces are in the correct order,” says Bob Mulhern, senior managing director, Colliers in Arizona. “My father-in-law explained this to me. Take any two pieces of the telescope and reverse them, and everything becomes blurry, even things that should be easily evident. Priorities, he explained, work the same way. Keep them in order and the sky is the limit … mix them up and nothing in life is clear.”

STARTING POINTS

Mulhern certainly has kept his priorities in the right order during an extraordinary 35-year career in the commercial real estate sphere. His exemplary service to clients, longstanding colleague relationships and dedication to excellence emanate from his own telescope sequence. “Faith, Family, Health, Work, Community,” he says. “I have always understood that success is rooted in mastering the basics. I know and live my priorities. There is nothing more important than to be giving the person in front of me the time, attention and respect that they deserve.”

BACKGROUND

An Arizona State University graduate (Bachelor of Science in Business Administration and Master of Business Administration), Mulhern began his career at CBRE, and subsequently at Ryan Companies and Reliance Companies before joining Colliers in 2009. “Colliers is a magnificent organization with an unparalleled level of dedication to their clientele, team members and community,” he says. “Our clients are looking for brokers with integrity who understand value and are results-oriented. They want strategic and tactical partners who support their efforts to successfully manage the real estate aspects of their businesses. We work hard to provide this type of elite service.”

Above: Mulhern family photo at Bob’s son's wedding. Left: Bob’s daughter, Christina, being kissed by Pope Benedict.

respect them,” he says. “After everyone has spoken, and sometimes tears are shed, we conclude with a big group hug. This has become a very powerful way we keep our family united, and our hearts knit tightly together.”

FOUNDATION

Mulhern’s success in CRE is a result of deep moral and spiritual values, which also guide his actions in all aspects of his life. “Those who know me well know that I have abandoned myself into God’s hands without reserve and with boundless confidence. The tender compassion I draw from that relationship powers my ability to do everything I do,” he says. “When I am most authentically who God made me to be, embodying His Spirit while embracing my professional vocation, I am most successful and generous in my support of others.” This connection, and the faith that accompanies his belief system, can be seen in every facet of Mulhern’s life, especially family. The molding of Mulhern’s character began in his youth as one of 12 children. “My wife

COMMUNITY Tina and I have 17 brothers and sisters between us, so we were both born into small communities. This allowed us to learn, early in life, that we are all in this together,” he says. That mentality has continued with the Mulhern Family. “Counting our nine kids, their spouses, the grandkids, Tina and me, we are up to 21 people (with another grandchild on the way),” he says. Their love of family and commitment to each other is conveyed in a powerful and meaningful expression. “Every birthday, we gather around the table and honor that individual’s birthday by telling them, one by one, the reasons we love and

Families are communities, as are neighborhoods, businesses, schools and churches. It is Mulhern’s devotion to these communities which elevates his stature as one of the Valley’s most influential individuals. His work nearly two decades ago as co-founder of Veritas Preparatory Academy and GreatHearts Academies is a prime example. “The Veritas mission extolls the importance of virtue: to cultivate the minds and hearts of students through the pursuit of Truth, Goodness, and Beauty,” he says. That sense of passion and purpose for community is also on full display at Colliers, where Mulhern has engineered one of the most successful brokerage operations in the region by © MPmedia, LLC 2021

assembling premier talent. “My role at Colliers allows me to help others continuously become better versions of themselves, personally and professionally,” he says. “Colliers is a fantastic place for smart, successful professionals to accomplish great things, not just for their clients but also for themselves.”

TENETS OF EXCELLENCE

The success of Colliers’ franchise in Greater Phoenix is, without question, due to the quality of the team members. However, talent without direction often does not fulfill potential. Leadership at the top is a critical necessity for building and sustaining long-term favorable outcomes, and Mulhern has repeatedly demonstrated his prowess. “I see leadership as virtue in action. By this, I mean having an active heart for recognizing the greatness in others and empowering them to strive for greatness (the virtue of magnanimity) while fulfilling their duties to their Creator, their families, and their neighbors,” he says. “Leadership is built on four key human virtues first laid out by Plato: prudence (making good decisions), courage (staying the course), self-mastery (directing passions for the good) and justice (treating everyone as they deserve, which is usually with love and respect).” His sagacity, counsel and passion continue to push those around him to excel. “I am convinced that every person has a great purpose in life, so I have embraced the role of coach and mentor to help others recognize and be able to articulate their unique gifts and talents,” he says. “Most people cannot resist the pursuit of personal excellence when presented a compelling encouragement to achieve it.”

ACCOLADES

For all of his remarkable efforts in the communities he serves, Mulhern earned Colliers’ Tom Richardson Award, “recognizing personal character, service, integrity and extraordinary spirit,” according to the company’s website. The award celebrates the honorable legacy of one of Colliers' former market leaders, it says. “It is very humbling to be the recipient of an award named after such a talented and wonderful man as Tom. I accept the recognition as the leader of © MPmedia, LLC 2021

Mulhern family attending Best of NAIOP when Bob was honored.

“Even as a university freshman selected for the ASU Leadership Scholarship, Bob quickly became a leader among leaders. That has only continued throughout Bob’s adult life devoted to his faith, family and profession. While I have interacted with thousands of students over decades, there are a few who become lifelong friends; individuals you know you can count on at any moment. Bob is one. His integrity, professionalism and his disarming smile gifts all the people fortunate to work with and call him a friend.” —Christine Kajikawa Wilkinson Senior Vice President and Secretary of the University, President/CEO, ASU Alumni Association

the Colliers Arizona team, whose talent, dedication and support has brought out the best in me in ways I could never have imagined,” he says. “We earned this recognition as a team, and I am blessed to be the one who gets to accept it on all of our behalf.”

FUTURE

The road ahead is filled with promise for Mulhern, his family, team and all those fortunate enough to be part of his amazing circle. “I hope to continue my role as Colliers’ local market leader, as long as I can maintain life-work balance and be a productive part of the

team,” he says. “For me, personally, my joy will continue to come from allowing God to expand my heart and, hopefully, make a saint out of me, to be the husband of Tina’s dreams, working daily to be a passionate and compassionate dad and papa, being a true friend for life, participating fully in the life of our community, continuing to recognize the unique abilities in others and encouraging them to strive for greatness, and to continue to advance on the path of love.” The telescope is operating correctly, that abounding enthusiasm is detectable light-years away.

THANK YOU To our brokers, partners, lenders, and tenants for your trust and commitment.

www.trammellcrow.com

THE NEW AGE OF The pandemic changed our daily lives, including our spending habits. E-commerce was already experiencing an uptick. Enter the pandemic, which catapulted it to record highs. A new era is upon us. A post-pandemic world is within our sights and the commercial real estate market is recovering, quickly. The New Age of Industrial means more efficiency, technology and, most importantly, growth.

INDU © MPmedia, LLC 2021

Andrew Geier, Rick Butler, Cathy Thuringer, David Krumwiede

USTRIAL © MPmedia, LLC 2021

s 2020 closed, the Greater Phoenix Industrial segment continued to flourish, according to numbers from JLL: year-to-date net absorption of 9.1 million square feet, Quarter Four deliveries of 5.3 million square feet and 6.2 million square feet in the construction pipeline. The industrial boom began years before the pandemic; however, the acceleration of e-commerce added fuel to an already-roaring sector. One of the many beneficiaries is Butler Design Group (BDG). “While COVID-19 has adversely affected so many industries, the industrial market in the Valley has thrived,” says Rick Butler, Principal. “In 2020, roughly 75% of BDG’s work was industrial and 2021 looks to be very similar.”

Starting Points

Founded in 1996, BDG has been a participant in many of the major office, medical, retail and mixed-use projects across the Valley, including among many notables SkySong Innovation Center, Creighton University at Park Central, Rivulon, Cavasson, PV303 and Tempe Marketplace. And of course, BDG’s industrial presence is equally impressive. “Dick’s Sporting Goods distribution center was the firm’s first large project on the 303,” Butler says. “BDG has been fortunate to have worked on a considerable number of terrific projects such as REI, UPS, XPO, Daimler, Ferrero, Red Bull DC and Mark Anthony Brewing.”

Inside Industrial

Distribution, logistics and warehouse facilities are the core drivers of the industrial surge with “90% of the market’s under-construction inventory” in these product types, according to JLL. “While the 303 Corridor is getting most of the attention due to the mere size of the projects, other submarkets and smaller single-user and multi-tenant projects

Rick Butler, Korey Wilkes

BUTLER DES 18

are also doing well, particularly in the Southeast Valley, and East Mesa is picking up steam,” says Korey Wilkes, Principal with BDG. In terms of building specifics, trends prior to the pandemic are continuing. “COVID-19 appears to have had little impact on industrial standards and design,” says Butler. “The only exception involves Build-To-Suits (BTS) when they include significant office elements. Like corporate offices, industrial main offices are looking at employee spacing, touchless entry and fixtures, sanitary measures, and divided spaces,” adds Wilkes.

Opportunities and Threats

The Valley’s robust economy bodes well for the ongoing expansion of the industrial segment, as does burgeoning e-commerce activity. Sales reached 14% of all retail purchases in 2020, as compared to 11% in 2019, according to the U.S. Department of Commerce. “From what we are seeing, 2021 looks to be an extension of 2020 with continued growth and absorption in the industrial market throughout the Valley,” Butler says. There are risks though to the sector, which Butler points to as potential headwinds into 2022. “Labor scarcity, rising construction costs and a shortage of materials, such as steel and lumber, are real threats,” he says. “These current construction challenges force clients to move forward more quickly than anticipated with more ‘at-risk’ [sometimes without all municipal approvals] contributing to the everpresent tension of development.”

BDG Ahead

With industrial in the spotlight, Butler is optimistic that other commercial real estate properties will come back online in 2021. “BDG is prepared (and excited) for other markets to come back post-COVID … like office, retail, mixed-use and various entertainment concepts post-COVID 19 ‘normalcy’, whatever that will be. Arizona should thrive. We are lucky to live and work here,” he says.

SIGN GROUP © MPmedia, LLC 2021

Brock Grayson, Andrew Geier

LAYTON CON

survey of Layton Construction’s robust industrial portfolio indicates the company is still pursuing excellence, as defined by the company’s founder, Alan W. Layton. “His value proposition: Constructing with Integrity. Our integrity is measured by hard work, thrift, honesty and fairness,” says Andrew Geier, executive vice president, Arizona. “We have built an impressive roster of world-class clients in the distribution, warehouse, logistic and manufacturing space, because we continue to abide by these tenets.”

Starting Points

With a national presence, Layton’s industrial footprint includes fulfillment and logistics centers for Amazon, UPS, Lincoln and HomeGoods, according to the company’s website. “What it really comes down to is our extensive experience within the industrial sector. We provide invaluable insight from the start, helping influence the project at the best possible price,” Geier says. “We do what we say we are going to do, and we provide predictable outcomes.”

Industrial 2020

As the First Quarter of 2020 unfolded, industrial was already a booming sector, from 2014-2019, with absorption rates exceeding deliveries, vacancy rates falling and asking rates increasing,” according to Avison Young. Then, the pandemic hit, and unlike office and experiential retail, industrial absolutely exploded to the upside. “We took everything in stride and never really stopped. We actually increased productivity throughout the pandemic,” says Brock Grayson, vice president. “The pandemic pushed people into more online shopping and increased the demand for online resources.”

Industrial 2021

The e-commerce boom precipitated a supercharged fulfillment, distribution and logistics environment, across the country, but particularly Greater Phoenix. “Our proximity to large markets on the West Coast makes the Metro an ideal location for these types of facilities,” says Geier. “We all know the demand for faster fulfilment continues to grow, and we

believe this will greatly impact the growth of e-commerce facilities and, therefore, industrial construction.”

Client Demand

Clients seek out Layton’s expertise on project, site and building characteristics, across a range of considerations, including price, quality, time-to-market and design specifications. Industrial construction is particularly nuanced given technology disruption, constantly evolving supply chains and the speed and volume of delivery. “Price and schedule are always key. Beyond that, clients want marketable buildings that not only meet the standards of the market but exceed them to remain competitive in appearance and feel,” says Geier. “Clients look to the e-fulfillment giants that are Layton clients and want to replicate them, which may be in terms of clear heights, slabs, parking ratios and other factors. As experts, we help guide their decision-making process in terms of ‘above market’ value-added building components.”

Industrial Post-COVID

The positive trajectory for the industrial segment is accelerating, especially as e-commerce trends and last-mile delivery show no signs of a slowdown, and likely will expand further. “We certainly do not foresee an overbuilt market. We anticipate more industrial project requests, as well as a bigger focus on this region from other markets,” says Geier. “The year 2020 was highlighted by numerous build-to-suit projects, and we see 2021 with a heavier focus on speculative development.” There are of course obstacles to the flurry of construction deliveries and future pipeline growth. “The real challenges from the pandemic, however, are actually happening now, with material shortages and cost increases,” says Grayson. “Moreover, purchase costs and lease rates must remain attractive to prospective end users, as land and construction costs steadily increase.”

Future

With the industrial sphere surging, Layton’s Arizona team is ready to engage on a range of new client projects. “Industrial opportunities in the region are plentiful, and we definitely see continued success—and that is what we are working toward,” says Geier.

NSTRUCTION © MPmedia, LLC 2021

auging the Greater Phoenix industrial market over the past five years has been a straightforward proposition: Bullish. Cathy Thuringer, managing director, Phoenix, Trammell Crow Company, has navigated commercial real estate market cycles over a stellar 30-year career. She points to the current conditions as favorable for continued expansion. “From 2016-2020, industrial absorption in the Valley has averaged 10 million square feet, a substantial increase to the average annual absorption posted for the previous 10-year period,” she says. “This increase in industrial demand is correlated to the tailwinds that the Metro is experiencing in terms of economic fundamentals, consumer e-commerce trends, evolving supply chain objectives in a post-COVID environment and the resurgence of manufacturing,” says Ryan Norris, vice president, Phoenix. “Absent any major macroeconomic events, the future of industrial in Metro Phoenix will remain bright.”

Starting Points

Thuringer’s sterling record of accomplishment speaks to her professionalism, expertise and dedication to clients: “6 million square feet of development projects with a market value approaching $1 billion,” according to Trammell Crow Company. Perhaps even more impressive, Thuringer has called the company home her entire tenure in the industry. “Trammell Crow Company is the nation’s largest commercial real estate developer, and an incredible company,” she says. “Our talented team members are committed to excellence and continue to deliver world-class service to our clientele.”

Industrial

Trammell Crow Company’s industrial footprint is one of the most robust in the region, including, among many, Gilbert Gateway Commerce Park, West 202 Logistics Center, Park Lucero, Cowden Logistics Center and Akimel Gateway. “In March alone, our office conducted an industrial asset sale at Park Aldea in Glendale, which recorded as the highest sale price-per-square-foot for a shell building – $130 psf – in Phoenix industrial market’s history,” she says. “In addition,

the firm closed a purchase deal in March on a 25-acre Tolleson site for an industrial logistics building. We are vigorously pursuing opportunities in the marketplace.” The company’s prolific acquisition, disposition and development activity stems from a fundamental belief in the strength of the Greater Phoenix Industrial sphere. “Trammell Crow Company’s strategy is to develop the best product on the best sites in the best submarkets,” she says. “With projects throughout the Valley, we are seeing strong demand across the Metro for general industrial, distribution and manufacturing space.”

Trends and Tenants

As 2021 unfolds amid the COVID-19 vaccine rollout and an improving business climate, the Phoenix industrial sphere rolls on with a significant tailwind. “The quickness with which Arizona’s economic and industrial fundamentals rebounded attracted investors to our market and drove their appetite to invest here versus other areas of the country,” says Thuringer. “Buyers are looking for best-in-class location, functionality and quality of construction,” says Cullen Mahoney, vice president, Phoenix. “These are attributes that attract the best mix of tenants and drive stable cash flows, which in turn generate better investment returns for buyers.” The industrial surge is poised to accelerate with logistics, transportation and distribution taking center stage as key elements of economic dynamism. “This scenario is largely driven by e-commerce expansion, and supply chains moving from a ‘just in time’ to a ‘just in case’ model with more facilities holding greater supply closer to consumers,” she says. “Near-shoring and on-shoring of manufacturing operations to mitigate dependencies on foreign manufacturing and strengthen the supply chain will continue. All of this portends increased growth for the industrial sector.”

Future

Thuringer’s outlook on industrial builds on the impressive gains of 2016-2020, and her team is positioning Trammell Crow Company to capitalize. “Metro Phoenix will continue to benefit from strong economic and market fundamentals and further propel the Valley as a best-in-class market for occupiers and investors,” she says.

TRAMMELL CR

Ryan Norris, Cathy Thuringer, Cullen Mahoney

ROW COMPANY © MPmedia, LLC 2021

John Orsak, David Krumwiede

LINCOLN PROPE

his year, Lincoln Property Company’s (LPC) Desert West division celebrates its 20th anniversary. David Krumwiede, senior executive vice president at LPC, has been leading the organization’s robust growth from day one. “We hit the ground running in Phoenix 20 years ago, and we’ve done nothing but grow our retail, office and industrial portfolio,” he says. Mention that last market segment and Krumwiede voices considerable enthusiasm. “I am very optimistic about the future of industrial. Based on the numbers we’re seeing, industrial demand in Phoenix will only continue to expand,” he says.

Starting Points

Krumwiede points to absorption and pipeline data as evidence of a vibrant industrial sphere in the metro. “Absorption nearly doubled from 6.43 million in 2019 to 12.7 million in 2020, while new industrial deliveries also more than doubled from 7.11 million in 2019 to 14.45 million in 2020,” he says. “We’ll watch these trends closely, and as long as demand and absorption remain consistent, we feel confident about growing our development pipeline.”

Phoenix Industrial

LPC’s industrial ecosystem extends across the Valley with best-in-class assets including Park303, Lincoln Logistics 40 and Buckeye85. “Clearly the Southwest Valley and Loop 303 Corridor are in high demand. There is also dramatic demand emerging for land and space along the Loop 202, heading east toward Gateway Airport,” he says. “Looking ahead, I see a continued push west along I-10. The challenge there is infrastructure, but that will come with time and demand.”

Digital Commerce

The growth of e-commerce prior to the pandemic was on a steady climb. Then in 2020, online buying surged by 32.4% over 2019, according to the U.S. Department of Commerce. That pace accelerated the Valley’s already-booming industrial segment. “Heading into the pandemic, metro Phoenix was poised to excel. COVID just sped up that process by increasing online shopping activity and depressing growth in sectors like senior housing, hotels and retail, which pushed billions of dollars in capital toward sectors like industrial,” says John Orsak, vice president at LPC. “The e-commerce momentum

we’ve enjoyed and the strong interest in Phoenix industrial space is not likely to go anywhere.”

Product

The wave of digital purchasing coincides with a transforming distribution and logistics infrastructure. Always a market leader, LPC has integrated characteristics into its industrial projects to ensure they exceed the demands of these new trends. “Buildings need to be supply-chain-centric with modern cross dock configurations, lots of secure trailer storage and interiors that make the most of a footprint,” says Krumwiede. “Moment frame shear bracing and multi-story mezzanines alone can double or triple interior space and efficiency.” In addition to usability, Krumwiede highlights a new dynamic in the industrial market. “Today’s industrial developments are true employment centers that need easy access to freeways and housing, a lot of convenient parking and amenities that keep workers comfortable, like modern break rooms, outdoor seating and game areas,” he says. “We think about this for office space but tend to overlook it for industrial. We’re working to change that.”

Phoenix Forward

With powerful economic expansion underway, the Valley’s industrial sector has a bright outlook. “Every investor is looking for yield, and Phoenix delivers that advantage better than any Tier 1 market. We offer long-term stability based on geographic proximity to Southern California ports and the Mexico border, a rising population and a low cost of doing business,” says Orsak. “Arizona’s business-friendly climate also supports a long track record of state and local advantages that include labor, housing, land and development costs. This keeps us competitive on a regional, national and global scale.” “A push west along I-10 may be one of the bigger game changers in the coming years,” says Krumwiede. “That will take a concerted effort to establish water and power, new street infrastructure and housing to support workers. But it will also offer cheaper land, which makes any project pencil better.”

Future

Krumwiede’s third decade at the helm of LPC’s Desert West region holds enormous promise for his team and the market, particularly in the industrial arena. “We’ve had skyrocketing growth, which is wonderful. But for the long game, consistency and excellence are the prime objectives,” he says. “I want to see Phoenix keep its supply and demand dynamic in balance, while we continue to build superior industrial spaces.”

ERTY COMPANY © MPmedia, LLC 2021

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BROKER TEAM OF THE MONTH Jeff Hays & Tate Gunning For Commercial Properties Inc. brokers Jeff Hays and Tate Gunning, the mentor/mentee relationship they have developed is successful and special to both men. “After three years of working together, I continue to be impressed by Tate’s work ethic and commitment to excellence,” Hays says. “As partners, Jeff and I complement each other’s skill sets well. Jeff is the knowledgeable senior agent with experience that is invaluable. I am his ambitious junior partner. Together we make a great combination,” Gunning says.

STARTING POINTS

In 2013, Hays joined CPI, with Gunning arriving five years later. The industrial sphere is the duo’s domain, and one in which they see enormous expansion. “With regards to the Greater Phoenix market, I can say, certainly in my 36 years in the business, this may be one of the most active and dynamic markets I have ever experienced,” says Hays. “Industrial is booming nationally, Valley industrial feels magnetic,” says Gunning.

JOURNEY

One of CPI’s core values is “Attitude is Everything,” a mantra that Hays and Gunning display in their professional

careers and learned from their parents. “They both were such big influences in my life and helped shape the person I am today – not afraid to work hard but having fun doing it,” says Hays. “My childhood obsession was to become a professional athlete, so my father helped to install motivation by driving principles such as discipline and hard work,” Gunning says.

BACKGROUND

Industrial commercial real estate always seemed a natural fit for Hays. “I was attracted to the sector, which may have been because my father was a salesman in the automotive/truck hardware business. When I was younger, I traveled with him © MPmedia, LLC 2021

Jeff Hays, Tate Gunning

to various warehouse properties, truck terminals and car dealerships to call on his clients,” he says. For Gunning, a baseball and football standout at Arizona State University and Western New Mexico University, respectively, the road was a challenging one. “I went down the wrong path and threw away athletics for addiction,” he recalls. “Thankfully, I was referred to a great recovery program by Conley Wolfswinkel and Carson Brown about seven years ago, and life has been a blessing ever since.” The determination and tenacity that carried him to athletic accomplishments and successful recovery is also serving him well in CRE, beginning his career as an intern with Land Advisors Organization in 2016.

METRO INDUSTRIAL

The pandemic could not slow down the industrial segment in the Valley. Rather, the market accelerated as digital retail flourished. “All facets of industrial are booming, including e-commerce, logistics, construction industries, food and beverage users, and data centers, to name a few,” says Hays. “The outlook for industrial is positive in my view. Demand will continue, as Arizona is roughly 30%-40% below average

position for now and provide a pipeline for the next few years. This will benefit the larger end-users, specifically in the Southwest sub-market, such as Phoenix, Tolleson, Goodyear, Buckeye and Surprise to the north,” Hays says. “There are nice combinations of big-box distribution and manufacturing buildings, built heavily in response to support new growth,” Gunning says. “Investors have also done a nice job reinvigorating the Downtown Phoenix Warehouse District with new life, functional properties, and creative space uses.” Hays is also extremely bullish on logistics and distribution properties, which investors are aggressively pursuing. “Some Buyers/Investors want transportation-type properties that feature lower building-coverage ratios than the ‘prototypical’ industrial building. These property types are either Less Than Truckload (LTL) crossdock terminals, truckload facilities which are used for a transfer or drop yard, and equipment repair and service centers, which all require more land (5-10 acres minimum) for their fleet of tractors/trailers and equipment,” he says. “The tenants of these types of properties are experiencing nice growth due to ‘last mile’ delivery business and strong demand from e-commerce, fulfillment centers and the general warehousing sector.”

“All facets of industrial are booming, including e-commerce, logistics, construction industries, food and beverage users, and data centers, to name a few. The outlook for industrial is positive in my view. Demand will continue, as Arizona is roughly 30%-40% below average in rents in comparison to the L.A. and Orange County areas. Supply is also robust with nearly 8 million square feet of properties under construction at the close of 2020.” —Jeff Hays in rents in comparison to the L.A. and Orange County areas. Supply is also robust with nearly 8 million square feet of properties under construction at the close of 2020.”

BY THE NUMBERS

According to CPI’s market report, the Q4 industrial sector in 2020 ended with a bang and pushed into 2021 with massive momentum. At the end of the fourth quarter alone, the firm closed on 192 industrial deals comprising 905,179 square feet. As a region, net absorption totaled 8.6 million square feet, vacancy rate was 7.2%, Cap Rates hovered around 6.2% for industrial, rental rate was $8.80 per square foot and sale price per square foot was $119. “Speaking to investors, I tell them this market is hot, so be ready to commit once we find the right fit for your needs,” says Gunning.

PRODUCT

With the flurry of activity across the industrial sector, Hays and Gunning are eyeing incredible opportunities in a range of assets and offerings. “Spec buildings will maintain their

OUTLOOK

A strong 2021 for industrial will set the stage for further gains in 2022 and beyond. This trajectory is based on the region’s impressive economic, demographic and governance trends: migration, low tax environment, regulatory light touch, competitive cost structure, infrastructure and quality of life. “The demand drivers that have been Phoenix’s staple will support industrial fundamentals going forward,” Hays says. “Our current aim is at off-market opportunities, both in and out of state. We are constantly researching attractive industrial sites and sale-leaseback opportunities Valleywide,” Gunning says.

FUTURE

With industrial soaring, Hays and Gunning have much to look forward to in the coming quarters. “It is so important to work and communicate with your clients consistently and do the ‘little extra’ than what may be expected,” says Hays. “Our intention is to drive commerce innovatively while creating value for our clients,” Gunning says. © MPmedia, LLC 2021

INDUSTRIAL TO WATCH

CONOR COMMERCIAL

Sven Tustin, Executive Vice President Derek Buescher, Senior Development Manager

Conor Commercial has gained success nationally as a developer in all major regions, and it doesn’t stop in Phoenix. Leading the company’s development team is Sven Tustin, executive vice president, and Derek Buescher, senior development manager. With industrial projects keeping them busy in the Valley, Tustin and Buescher predict continued success in the industrial space.

PROJECT TO WATCH

Lotus Project is one of Conor Commercial’s most successful multitenant industrial projects recently. In 2018, Conor purchased the 53-acre property from the city of Chandler, which had intended to use for a water treatment facility. High-profile advanced manufacturing tenants were attracted to the project’s infill location at the intersection of the Loop 202 and I-10 freeways, proximity to a strong skilled labor employment base, and specialized design. Conor also emphasized enhanced building and landscaping aesthetics, recognizing that companies tend to focus on buildings that complement their brand, differentiating the company’s projects from typical industrial buildings. The combination of a great roster of long-term tenants with a favorable capital markets environment allowed Conor to sell the first phase of Lotus in March, well ahead of schedule and at values in excess of the company’s initial projections—a true success for Conor, its partners, and the community. CEM: There have been predictions that the industrial sector will continue to have unprecedented growth in 2022. What are your thoughts? ST: We agree that the industrial sector will continue its record-setting growth. Prior to COVID-19, changes in consumer behavior regarding e-commerce was already propelling industrial demand to

Sven Tustin, Derek Buescher

new heights. COVID’s effect on industrial demand is even more pronounced in four areas: 1. E-commerce: Consumers’ reluctance to shop at traditional retail venues further increased the popularity of e-commerce, driving the need for more last-mile delivery facilities. 2. Logistics: The previous just-in-time logistics model relied on a lean inventory with predictable demand, but recent product shortages forced retailers to increase inventories, which require more warehouse space. 3. Supply chains: The disruption on foreign manufacturing exposed a major weakness in domestic supply chains, causing an uptick in U.S.-based manufacturing facilities. 4. Warehousing: Residential preferences are rapidly changing as people embrace remote working, driving population growth in desirable markets such as Phoenix, which in turn increases local consumption and creates more demand for warehousing. CEM: What are you excited for post-pandemic in the industrial space? DB: The pandemic really accelerated the widespread adoption beyond Gen X and Millennials of e-commerce for daily essentials. As consumer expectations shift and we become more accustomed to the convenience of delivery, I believe post-pandemic we are going to see an accelerated adoption of online grocery delivery and the industrial infrastructure needed to store temperature-sensitive goods. Brick-and-mortar grocery stores are only just beginning to restructure their

Lotus Project

supply chains to meet the demand of online sales and grocery delivery. CEM: What’s in store for your industrial team/company that the industry should watch for? ST: With our recent success leasing and selling both Airport 40, a 320,000-square-foot infill project leased to a major e-commerce company, and the first phase of Lotus Project, we will continue to concentrate our focus on infill industrial development suitable for lastmile distribution and advanced manufacturing. Given the lack of available land within urban area, most of the last-mile sites are either adaptive reuse or redevelopment of improved properties, which all come with greater degrees of complexity that greenfield development often lacks. While these projects are more demanding, the scarcity of supply and increasing demand for them makes them compelling development opportunities. © MPmedia, LLC 2021

INDUSTRIAL TO WATCH

STEVENSLEINWEBER CONSTRUCTION, INC. Jamie Godwin, President Erik Powell, Vice President

This year marks an impressive 40th anniversary for Stevens-Leinweber Construction, Inc. (SLC). Committed to best-in-class experiences for their clients, subcontractors and the municipalities in which they work, Jamie Godwin, president, and Erik Powell, vice president, are expecting 2021 to be a record-setting year - not only for tenant improvements, but also for their booming ground-up industrial business.

PV 303 West II

PROJECT TO WATCH

PV 303 West II started as a 643,000-squarefoot shell building but quickly evolved into a full-building tenant improvement for Mlily, who had committed to a long-term lease that would bring about 300 new jobs to Phoenix. Like so many projects in the super-fast-paced industrial sector, success hinged on how quickly SLC’s team could get the highest-quality product from shell to move-in ready, based on Mlily’s extremely tight timeline. SLC received approval for the tenant improvement about three months into shell construction, and was able to work with Mlily and the design team to integrate manufacturing plans and ensure tenant occupancy just 30 days past the original shell completion date. Everyone involved was extremely pleased with the outcome, and SLC now has a great new global industrial tenant in the Loop 303 corridor. CEM: There have been predictions that the industrial sector will continue to have unprecedented growth in 2022. What are your thoughts? JG: We agree that the industrial sector is poised for a significant run through 2022 and likely beyond. The amount of speculative space being built should always be approached with caution, especially after © MPmedia, LLC 2021

Erik Powell

the events of 2008 to 2009. But this time seems different. New space is being filled in short order and tenant demand remains strong with developers from all over the country competing to find their spot in Phoenix. The Valley still has extremely attractive land costs compared to other markets and the employee supply chain continues to grow. That makes us optimistic for our industrial future. CEM: What are you excited for post-pandemic in the industrial space? EP: The industrial market has been extremely strong for us during the pandemic and it looks like that success will continue. I’d like to see material availability and cost get back to normal, but

Jamie Godwin

I think we will continue to face issues in these areas throughout 2021. I’d expect supply chains to get caught up this year and for stabilization to occur in 2022. CEM: What’s in store for your industrial team/company that the industry should watch for? EP: Our ground-up industrial division has a full book of business for 2021, and we’re creating a great backlog for 2022. Whether for our office and industrial TI assignments or our ground-up division, we continue to grow our team at a responsible pace and are committed to partnering strategically with developers and end users as we always have to build long-lasting relationships.

INDUSTRIAL TO WATCH

VIAWEST GROUP Steven Schwarz, Founding Partner

ViaWest Group has its sights set on expansion, and Steven Schwarz, founding partner, is leading that growth. Regionally, the company is expanding its industrial development operations to Colorado and Utah, with a new office in Denver. Locally, the company will remain aggressive on finding new properties to develop in the Valley.

PROJECT TO WATCH

While not fully played out, ViaWest’s purchase of the Bayless properties in 2019 is a great example of the group’s industrial development platform. John Werstler and Cooper Fratt at CBRE undertook a systematic process that enabled the company to dive in and understand the inherent value of these properties. The properties contained all elements of the development business: a dilapidated cold-storage building, a building leased to Ferguson Plumbing that they would be vacating, extra land, and a clean, empty parcel south of Sky Harbor. ViaWest has been able to renovate the cold-storage building, sign a long-term lease with Ferguson on the extra land, and develop two buildings (that are already 50% leased) on the empty land using the Opportunity Zone legislation. The Bayless purchase shows how ViaWest can “wear many hats” and use unique approaches to maximize the value of real estate. CEM: There have been predictions that the industrial sector will continue to have unprecedented growth in 2022. What are your thoughts? SS: The Phoenix industrial market will continue its growth in 2022. This is due to continued exponential growth in e-commerce, reshoring of manufacturing, and a trend toward increased domestic inventories post-pandemic coupled with the in-migration to Arizona boosted by the exodus from many heavily urban markets. Tenant demand and net absorption should continue much like 2020’s record numbers. Supply will remain in check

Superior Logistics Center

in most markets due to limited land availability and high construction costs, however I am concerned about a couple of submarkets that seem to have a large amount of supply coming online. Capital will continue to push cap rates down a bit more as the investment appetite for industrial is insatiable. CEM: What are you excited for post-pandemic in the industrial space? SS: The pandemic has actually been very good to the industrial sector, so I don’t see any major changes post-pandemic. The thing I am actually most excited for post-pandemic will be celebrating the successes of certain projects with our capital partners, tenants and brokers. I promised myself during the pandemic that once the world opened back up, I would take more time to celebrate the wins with the people that helped get us there. CEM: What’s in store for your industrial team that the industry should watch for? SS: ViaWest has a number of significant projects underway comprising nine projects totaling 2.2 million square feet of which most are infill. In the Sky Harbor market, we have recently completed the two-building 150,000 square-foot Superior Logistics Center, are under construction on the four-building 440,000 square-foot Central Logistics Center and are soon

Steven Schwarz

breaking ground on the 150,000 squarefoot Airport48 Industrial building. Along the I-10 freeway in the southeast Valley, we have the two-building 350,000 squarefoot Sight Logistics Park commencing in January, the three-building 510,000 square-foot Converge Logistics Center starting this September, and the 100,000 square-foot Carver Industrial building being renovated for occupancy in early 2022. As well, we have the threebuilding 410,000 square-foot Goodyear Crossings Industrial Park under construction currently, the 110,000 square-foot Chandler Crossroads Phase II being delivered early next year, and the two-building 140,000 square-foot AZ202 Commerce Park that was delivered last year. © MPmedia, LLC 2021

INDUSTRIAL TO WATCH

THE RENAISSANCE COMPANIES Jill Porter, Co-Founder & Chairman of the Board

Renaissance wouldn’t be the company it is today without one of its founders, Craig Porter, husband of Jill Porter, co-founder and chairman of the board. Sadly, Craig passed last year due to a glioblastoma, a multi-form brain cancer. It was his passion for the manufacturing and industrial market that made Renaissance a top general contractor for the Arizona market. This year, Renaissance celebrates three decades of being a leading contractor, and Jill will be at the helm, leading the company through Craig’s legacy.

PROJECT TO WATCH

Renaissance recently completed Red Bull’s first manufacturing facility outside of Europe. The success of this joint venture between Red Bull, Ball Corporation and Rauch Fruit Juices was due to the efficiencies of the design-build process between Merit Partners, The Renaissance Companies and Butler Design Group. Upon the selection of the land in Glendale, the design-build team made several trips to Red Bull and Rauch Fruit Juices facilities in Austria to diligently examine the unique building design and MPE intricacies. The team successfully translated that to American standards and codes in a desert environment that is the complete opposite of Austria. Today, over 1 million cans of their product are produced every day. There have been predictions that the industrial sector will continue to have unprecedented growth in 2022. What are your thoughts? JP: Phoenix will see continued growth as we head into 2022. CBRE’s recent North America Industrial Big Box Review & Outlook showed that Phoenix doubled its net growth in 2020 to 10.5 million square feet, making it the “Top Growth Market” for industrial big box in the nation. This is due to Phoenix having one of the fastest © MPmedia, LLC 2021

Jill Porter

growing MSA, transportation and water infrastructures, strong labor supply from our universities, and average of 100,000 people moving here each year, plus great tax incentives. Given the occupier transaction market share over the past two years, we expect continued investment in the Phoenix big box market from e-commerce, medical, food, beverage and general retail/wholesale companies. This gives us great confidence that our industrial team will continue to be very active over the next few years. What are you excited for post-pandemic in the industrial space? JP: The pandemic has opened our eyes to why manufacturing needs to move back to the United States. We are excited to work with our clients to achieve a new level of warehouse design that contributes to the next evolution of technological advancements with racking, robotic and various delivery systems. We also support developers with manufacturing clients to find the right piece of land or vacant building to meet their infrastructure and utility needs. One change we are already integrating into some distribution projects is the switch to a fully electric fleet and the need to have integrated dock charging stations fueled by a solar-covered roof. We feel this will not be unique for long as

RRB Manufacturing

e-commerce and distribution companies invest in the technology for electric and potentially driverless trucks. What’s in store for your industrial team that the industry should watch for? JP: Renaissance will continue to have a strong footprint for the manufacturing and industrial market as we continue to not only invest in our employees’ expertise but also in attracting Class-A talent. We started off our industrial reputation in 2011 by completing a 1.2 million square foot tenant improvement with 750,000 square foot steel mezzanine for Amazon Phx 6 in less than 90 days. Then, we constructed North America’s first LEED Platinum net-zero distribution center for REI in 2015. This year, we built Red Bull’s first manufacturing facility outside of Europe.

Resiliency in Real Estate Arizona’s self-storage industry a thriving market

The self-storage industry has proven to be resilient in both good and bad economic times. This is especially true in Arizona – particularly in Metro Phoenix, where it is thriving. Metro Phoenix was the second mostactive self-storage market nationally in 2020 (Metro New York City was No. 1), despite the construction pace slowing down (1.8 million square feet), according to STORAGECafé.

remained strong as residents expebusinesses that use them to store invenhis was driven by the recordrienced life-altering events such as tory, furniture, fixtures and equipment,” high completions in 2019, when moving and downsizing. People needed Gorden said. “With the month-to-month more than 2.3 million square to maximize space at home as they tranrental agreements in self-storage, facilifeet of new construction were sitioned to remote work and businesses ties have the ability to respond quickly added. At the time, Metro Phoenix that needed to reorganize operations, to market changes. Following best-pracdoubled in growth compared to 2018, according to STORAGECafé. tice recommendations circulated by the when the market had a little more than 1 That trend is likely to continue association, many operators took actions million square feet of new construction. through at least the third quarter of at the very beginning of the pandemic to Data indicates 18 new facilities 2021, and earlier if mitigation efforts provide relief to struggling customers.” (1.4 million square feet) will be delivsuch as the COVID-19 vaccine are During the height of COVID-19, ered in 2021 as the self-storage market in successful. However, Gorden says 2021 the self-storage industry in Arizona kept Arizona continues a healthy trajectory, will bring a return to the new normal in its doors open to serve the public and local industry leaders acknowledge. operations for self-storage properties as immediately implemented safe practices. “A multitude of factors has kept it will for the rest of the economy. Considered by Gov. Doug Ducey and self-storage supply and demand in “We will see some enhancements to the Arizona Legislature to be an essential balance for the last decade,” said business operations learned during the business, the industry enabled organizaJeff Gorden of the Gorden Group, a pandemic carry forward as permanent tions in health care, infrastructure, logisboard member with the Arizona Selfchanges,” Gorden said. “For example, the tics, maintenance, government and shipStorage Association (AZSA). “Similar acceleration of contactless (self-help) techping/delivery to run their businesses. to the single and multifamily housing nology may make renting a self-storage “There is a lot of kinship between industry, in self-storage there was a unit more like Redbox than Blockbuster. the operators of self-storage and the period following the Great Recession of minimal to no new construction. All the “We will see the valuations for self-storage properties continue while, the population of Arizona continued to to rise. Those new to the industry and large investment firms grow, both organically (i.e., Blackstone) are entering the self-storage investment and from net in-migration from other states.” market and paying all-time high prices for the stable, reliable Those elements cash flow that self-storage properties produce.” have helped the selfstorage industry grow —Jeff Gorden, Gorden Group and board member with in size and sophistication, Gorden said. He Arizona Self-Storage Association (AZSA) added that the majority of properties are still in the hands of small operators, but that “We will see the valuations for selfpeople who use it to store their propthis is quickly changing as large operastorage properties continue to rise. Those erty. Many of them are small business tors and "newer to the industry" buyers new to the industry and large investowners,” said Anne Mari DeCoster, aggregate the existing supply. ment firms (i.e., Blackstone) are entering COO of Storelocal Storage and past “From the national down to the the self-storage investment market and executive director of AZSA. “One year local level, we see a variety of operational paying all-time high prices for the stable, later, resilient occupancy statistics make and valuation strategies in the market. reliable cash flow that self-storage propit clear that self-storage truly is considEnhancements to business operations are erties produce,” Gorden said. ered essential by the renting public – coming at a rapid pace, as is the entry In urban areas, Gorden said, expect both individuals and companies who of large, well-known investment firms continued consolidation of the industry continue to use self-storage to facilitate that have typically invested in the mainwith fewer names represented. The their lives and businesses.” stream asset classes,” Gorden said. same could occur in the secondary and What else has attributed to Metro The self-storage industry also tertiary markets, albeit with different Phoenix’s robust self-storage market? proved resilient during COVID-19 for groups replacing the “mom and pop” “I think it’s a combination of many a number of reasons. Fundamentally, ownership makeup currently there. factors. During the past year, we have all self-storage facilities are not a place “The next five years will see growth adjusted, readjusted and done a great job where people gather in numbers. When in the self-storage industry as business to be ‘essential’ to our many customers office buildings and retail centers were and personal-use customers benefit from and make certain that we met their emptied for the purposes of social its advantages and efficiencies and as needs in a safe and efficient manner,” distancing, there was little need to do more of the U.S. population migrates to said Diane Gibson, president of Cox’s the same at self-storage facilities, except Sunbelt states like Arizona,” Gorden said. Armored Mini Storage Management, inside the leasing office. “For those on the leading edge, taking Inc., and 2021 AZSA president. “Self-storage facilities provided development risk or improving operaLike other real estate markets, the an essential service to the community tions at existing properties, the self-storage self-storage industry had its ups and during this time and for the many small industry is a profitable place to be.” downs in 2020. However, demand

LOTUS PROJECT PHASE 2 | AVAILABLE Q421

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