PHOENIX-In its efforts to meet the hot demand for industrial space, a joint venture between KTR Capital Partners LLC and local developer Tratt Properties LLC is preparing to break ground on Riverside Center, a 100-acre, 1.7-million-sf, class A industrial park in Southwest Phoenix.

Construction will begin in the second quarter on Riverside One, a 376,000-sf spec building. The plan is to deliver the structure in the fourth quarter, the firing pin for the construction start of Riverside Two, a 1.2-million-sf bulk distribution center that will be situated on 63 acres. "By the end of 2006, we likely could have half the project built up," says A. Donald Chase Jr., a partner with KTR Capital with headquarters offices in Philadelphia and New York City.

Chase estimates the 100 acres along Buckeye Road, positioned between 51st and 41st avenues, could be built out in two to three years. "We've had a lot of interest and a lot of inquiries," he tells GlobeSt.com. "The market for industrial space is tight right now so new developments are looked at with interest."

Deutsch Associates in Phoenix will is the architect for Riverside One. Chase says a general contractor will be selected within 35 to 40 days, as will the leasing team.

Construction and land costs aren't being released for the project, but land values in the immediate area can range from $1.75 per sf to $2 per sf and "all the way north of $3 per sf," Chase says. "Industrially zoned land is being absorbed quickly and there is a lot of competition for the sites remaining." And that, he continues, was the motivating factor for KTR and Tratt to join forces to develop the space. "It's a dynamic marketplace," he explains. "There's a lot of demand for this type of space."

Chase says KT Riverside LLC is the first joint venture between KTR and Tratt, but it most likely won't be the last. "We're looking to do more of this type of activity together," he says.