A long vacant Sam’s Club in Phoenix has been reborn as an industrial distribution facility—illustrating the overarching market trends for both asset classes in a single project. Developers DPC Companies and Confluent Development along with contractor Graycor Construction Co. redeveloped the 115,000-square-foot box and an adjacent Go Kart Track into HUB 317. The new class-A industrial property is 225,000 square feet.

“With some big boxes that are failing are absolutely good candidates for these projects. There is large square footage under one roof that is pretty simple to demise up into smaller spaces for flex industrial use,” Rusty Martin, project executive at Graycor Construction Co., tells GlobeSt.com. “This property had been vacant for awhile and it had gone through a few different hands. That made it a good deal from a purchasing standpoint, and due to its location, it fits a niche in this market for a distribution center of that size.”

There are a lot of benefits to converting a big box retail property into industrial. First, the box already exists, making it significantly less expensive. Converting retail boxes also brings new industrial product to the market much more quickly than new construction. This conversion project took seven months and included the addition of more than 100,000 square feet of ground-up construction. “The box is already there, and that is a big chunk of the cost,” says Martin. “The investment is in repurposing the exterior of the building to make it work for an industrial use, especially if there isn’t a truck courts or dock infrastructure already in place. That is really where the investment is.”

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Kelsi Maree Borland

Kelsi Maree Borland is a freelance journalist and magazine writer based in Los Angeles, California. For more than 5 years, she has extensively reported on the commercial real estate industry, covering major deals across all commercial asset classes, investment strategy and capital markets trends, market commentary, economic trends and new technologies disrupting and revolutionizing the industry. Her work appears daily on GlobeSt.com and regularly in Real Estate Forum Magazine. As a magazine writer, she covers lifestyle and travel trends. Her work has appeared in Angeleno, Los Angeles Magazine, Travel and Leisure and more.

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