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PHOENIX-An industrial developer is planning to build more than 1.3 million sf of speculative space in the West Valley, an area that has become increasingly popular with warehouse and industrial users as land prices elsewhere in the region have steadily risen.

Buzz Oates Enterprises Arizona has signed a long-term lease for s 226-acre parcel at the southeast corner of 75th Avenue and Van Buren Street and plans to begin construction on a 552,330-sf warehouse before year end, says Doug Barkdule, a partner in the Sacramento-based development company. It would be the largest speculative project to be built in Phoenix this year.

Barkdule won’t disclose the projected development cost. However, construction experts put the price tag for the building at between $13 million and $15 million.

“Large distribution users are price-conscious, and currently the southwest Valley has the least expensive land,” Barkdule tells GlobeSt.com. “You have to be confident that Phoenix will attract the large users, and that when they do, your product is ready.”

Barkdule says the company worked directly with the owner of the land, San Francisco-based Catellus Development, on the lease-purchase agreement. The contract gives Buzz Oates Enterprises an option in the seventh year of the lease to purchase the land for $1 per sf.

The company is also building a 330,000-sf speculative warehouse on a 93.5-acre parcel at the southeast corner of 47th Avenue and Buckeye Road. The building, with 30-foot high bays, is expected to be completed by November. A second 330,00-sf warehouse is under development on the same parcel, with timing about six weeks behind the first, Barkdule says.

Based on estimates provided by local experts, construction cost of each building should top $8.3 million. Buzz Oates Enterprises is also planning to break ground on a 107,000-sf industrial building at 1010 S. 65th Ave., just north of Buckeye Road, in October.

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