CASA GRANDE—The global logistics company Kuehne + Nagel, Inc. has taken a 201,666-square-foot, five-year warehouse/distribution lease in Casa Grande. The lease establishes Kuehne & Nagel's presence in the Central Arizona market—a growing site selection consideration for industrial distribution and logistics users in the Western United States. The Phoenix office of JLL completed the transaction.

“For the right users, Pinal County definitely offers an alternative to the high costs of Southern California industrial space,” says JLL executive vice president Pat Harlan, who represented building owner Clarion Partners along with JLL executive vice president Steve Sayre and JLL associate Kyle Westfall.

Harlan tells GlobeSt.com, “Kuehne + Nagel supplies third party logistics to Abbott Laboratories, located in Casa Grande, so it was a highly efficient location. Though the search for space did include Phoenix, it really made Casa Grande the best option. Pinal County is seeing interest from manufacturers due to labor costs, rail, I-10 and access to inbound product from Mexico via Tucson. Creating an inland port environment in and around Casa Grande—half way between Phoenix and Tucson—would allow companies to move their products from California's ports directly to a more cost effective, inland location, then on to the rest of the U.S.”

According to JLL's Q1 Industrial Report, warehouse/distribution space in Pinal County has done well in the past 24 months, dropping from 17 percent vacancy in 2012 to 13.1 percent vacancy today. Although absorption has remained flat, market recovery is pushing developers to consider new industrial and warehouse projects in the area.

“The vacancy trend is due to a solid recovery,” says Harlan. “In 2011 through 2013 absorption was mainly larger corporations. Now in 2014 we are seeing more regional and local occupiers. It's a healthier industrial sector. The 50,000 to 200,000-square-foot sector is the hottest trend right now. We're seeing users benefit from the growing economy and that will continue, especially as the housing industry catches fire.”

Kuehne + Nagel's new space is located at 2592 E. Hanna Rd., approximately five miles southeast of central Casa Grande and directly adjacent to Interstate 10. With approximately 63,000 employees at more than 1,000 locations in more than 100 countries, the Kuehne + Nagel is one of the world's leading logistics companies.