PROPERTY, GROWTH AND LOCATION
BY MIKE HUNTER
Phoenix Has Decade of Strong Industrial Construction It’s been quite a fruitful year so far for industrial real estate in the United States, reports Yardi Matrix in its recent “Top 50 Cities for Industrial Construction in the Past Decade” (commercialcafe.com/blog/top-50-cities-industrialconstruction-past-decade/). Citing the National Real Estate Investor, Yardi Matrix reports that total industrial sales are expected to exceed 2016 levels this year, marking the secondbest volume in 10 years. Large portfolio deals are also making a comeback, and both national and foreign investors are betting big on the market, drawn in by record rent growth. Demand is heavily fueled by the rise of e-commerce, with providers competing for the limited available space. Retail giant Amazon is on the lookout for a new, 8-million-squarefoot headquarters to support its growing e-commerce business, pitting major cities against one another. Other players in this sector are likely to follow suit, looking for suitable industrial space for their distribution centers. The rise of e-commerce and the need for strategicallyplaced distribution centers to meet growing customer demand are opening the door to a whole new era for industrial development in the U.S. Using its in-depth data, Yardi Matrix compiled a list of the top 50 cities for industrial development in the U.S., from 2007 to 2017. Phoenix, with 22.2 million square feet, came in second only to Houston as the top city, which had 32.2 million square
feet, and was followed closely by Forth Worth, at 17.5 million square feet. Inland Empire, with six cities in the top 10, is the nation’s top market for industrial development — 131.7 million square feet completed in the past 10 years. Market-wise, Phoenix has added 43.5 million square feet of industrial space since 2007, 11 million square feet less than New Jersey in the same number of buildings, ranking 6th nationally. The second city to add the largest amount of square feet in the market is Goodyear at number 25, boasting 5.3 million square feet of space delivered in just 10 buildings; it’s also expecting a 540,000-square-foot LEED-proposed addition in Goodyear Crossing Industrial Park by the end of the year. Tolleson and Mesa also made the top 50, at numbers 35 and 47, respectively. Yardi Matrix yardimatrix.com
TOP 10 IN INDUSTRIAL SPACE GROWTH The following markets added the largest amount of industrial space in the last 10 years. # Market Total Sq. Ft. / Properties
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1 Inland Empire 131,712,325 / 307 2 Chicago 108,798,851 / 322 3 Dallas-Ft. Worth 100,933,885 / 267 4 Houston 63,036,050 / 254
Photos courtesy of CapRock Partners, Square One Construction, CBRE (bottom, l to r)
Sky Harbor Market ‘Coveted’ CapRock Partners, a leading private industrial real estate investment firm based in Orange County, California, has acquired a distribution/manufacturing facility in the highly sought-after Sky Harbor submarket of Phoenix. “This asset is an ideal fit for our growing portfolio, as it is located in one of Phoenix’s most desirable submarkets and will allow us to utilize our extensive experience in repositioning, successfully marketing and stabilizing assets,” says Bob O’Neill, Senior VP of Acquisitions for CapRock Partners, who heads the firm’s expansion
Race to Remodel The home renovation business is booming as owners of high-end homes aim to increase the value of their homes for sale in a market where median sale prices have stagnated for homes built more than 10 years ago, due to an increasing inventory of high-priced but rapidly aging homes plus competition from new homes. Square One Construction is a new luxury renovation company specializing in interior and exterior renovations of high-quality but outdated homes that have quickly saturated the Scottsdale/Paradise Valley market. square1construct.com
efforts in Arizona. caprock-partners.com
Metro Phoenix places four cities in Commercial Café’s “Top 50 Cities for Industrial Construction in the Past Decade.” commercialcafe.com
Big Box Repurposed Consumer Cellular has signed a 164,000-square-foot lease with Everest Holdings — represented by Ashley Brooks in CBRE’s Phoenix office — in a former Sam’s Club located at 17500 N. Black Canyon Freeway, following the empty big-box store’s conversion to a singletenant office building. The national cell phone services provider will occupy the space beginning in March 2018 when the company opens its third call center in the Phoenix area. The new call center is expected to create an estimated 850 new
5 New Jersey 54,979,443 / 137 6 Phoenix 43,588,036 / 138 7 Atlanta 37,894,734 / 96 8 Charleston 37,647,029 / 112 9 Los Angeles 20,875,257 / 101 10 Philadelphia 17,489,974 / 51 Datasource: Yardi Matrix commercialcafe.com/blog/ top-50-cities-industrialconstruction-past-decade
jobs. cbre.com
Home remodeling hit an all-time high in the first quarter of this year, according to Metrostudy.com’s national “Activity Index.” The index is up 4.5 percent compared with last year.
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