square feet of spec industrial.
(Save the date: RealShare Industrial 2012 comes to The Banker’s Club, Miami, December 5 – 6.)
PHOENIX–Jones Lang LaSalle reports it has brokered a 38-acre land sale in this city’s southwest valley that will facilitate the start of construction of approximately 600,000 square feet of spec industrial.
The buyers of the site, located at the northeast corner of 63rd Avenue and Sherman Way here, are a joint venture of Seefried Industrial Properties of Atlanta and USAA Real Estate Co. of San Antonio. JLL managing directors Anthony J. Lydon and Marc Hertzberg represented the buyer. The seller’s agent is Rich Sica, executive vice president of Daum Commercial of Phoenix. No purchase price was released.
Construction is expected to begin next month on the Estrella Logistics Center, a $30-million, 592,500-square-foot cross-dock distribution building. The project is expected to be completed by next May.
“Seefried and USAA are specialists in developing, leasing and managing premier industrial logistics projects,” says Lydon. “They are experts at knowing what to build and where to build it, and they have chosen an exceptional time to deliver speculative industrial product in Phoenix.”
JLL officials report that there is approximately 6 million square feet of current user demand in the city of Phoenix for industrial space of 100,000 sf or more. They argue that supply has not kept pace with demand, noting that in the first quarter of this year, there was just 92,598 feet of net industrial absorption in Phoenix. In 2011, it totaled 6.9 million square feet in the city.
“The only local industrial construction that we’ve seen completed this year falls in the single-tenant, build-to-suit category,” adds Hertzberg. “This does little to satisfy this market’s broader demand for large blocks of space. This will be the key driver for new Phoenix speculative industrial development in 2012.”
Key industries that are driving industrial space demand include national retailers, food and beverage distributors and solar and e-commerce businesses. Phoenix has been attractive to industrial users due to its proximity to California, its 30% to 40% lower business costs, and the availability of quality land near transportation, JLL officials say.