CHANDLER, AZ-Making its first push into Greater Phoenix for its core portfolio, a Southern California investment group has plunked down $12 million for a 74,414-sf industrial building. The plan is to place up to $100 million for stable warehouse and distribution product within two years.
Bixby Land Co. snagged the 100%-leased warehouse, built in 2001 on 4.88 acres at 6825 W. Galveston St., from BLT Galveston LLC of Chandler for its good income fundamentals, says Mike Severson, Bixby's vice president of acquisitions and development. "There are four tenants in it, with varying expirations," he explains.
Paul Boyle with Grubb & Ellis/BRE Commercial LLC negotiated the transaction for both sides. The new owner's in-house team will handle leasing and management. Quoted rates in the area for industrial space average 72 cents per sf, triple net.
Severson says he's not too concerned about the warehouse's age as much as product type. "So much of Phoenix is new, we're likely not going to find many 30-year-old buildings," he adds.
Severson tells GlobeSt.com that the private REIT is seeking properties in the Greater Phoenix area because of its economics and demographics, but it's not holding anymore contracts right now. The population and job growth of the area should help it continue to stand out, he adds.
Also working in Bixby Land's favor is the demand for industrial space. As Phoenix continues its growth as a distribution center, experts predict vacancies will continue to be on the low side all year, with demand sharply increasing and little new product coming on line.
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