Consolidated Terminals Signs for 208,000 Square Feet

PHOENIX-Client requirements encouraged Consolidated Terminals and Logistics Co. to enter the Phoenix market in style by signing a 208,293-square-foot, 18-month lease at Reywest Commerce Park. As part of the transaction, landlord Cobalt Industrial REIT II will install a rail spur to serve the tenant.

Reywest Commerce Park at 109 N. 37^th Ave. was built in 1997 and, according to tenant representative Matt McDougall of Lee & Associates, was one of a very few options open to the Louisiana-based CTLC in the area.  “We started looking at spaces almost three years ago, and when they first came to the market at that point, looked at seven or eight properties,” McDougall tells Globest.com. “When they came back here a year ago, and were ready to really get serious, there were few options, really only two options.”

One challenge, he continues, was that landlords were wary of such a short-term deal. Then there is the problem being faced by other tenants; namely that huge blocks of industrial space in certain Phoenix submarkets are becoming more and more difficult to find. “During the past year we’ve seen positive absorption and vacancy rates coming down, especially in the southwest sections,” McDougal explains. “The market was improving and there were only a handful of rail-served buildings.”

Cobalt stepped in, however, even offering to build the rail spur. McDougal acknowledges that the New York City-based company, represented by CBRE’s Dan Calihan, Pat Feeney and Rusty Kennedy, is taking somewhat of a gamble, especially because the lease is only for a year and a half.

On the other hand, “this landlord understood that the big expenditure now would provide the added value of rail-served industrial space,” McDougal says.  With the demand for industrial space continuing to grow and the lack of rail-served space, Cobalt will end up doing very well, he notes.