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PHOENIX-A San Diego developer is pushing dirt on an $11-million, second phase to its Allred Sky Harbor Center, an industrial project near Sky Harbor International Airport.

The Douglas Allred Co. project includes flex industrial buildings of 90,000 sf and 57,000 sf. The two structures are going up near the southeast corner of 16th and Grant streets, and should be ready for lease or sale by April.

The airport area is faring better than most submarkets, where industrial space demand has waned. Around Sky Harbor International Airport, industrial vacancy is 6.7% in comparison to the Valley’s overall 7.2% rate. It is one of the few submarkets with positive absorption, with more than 118,000 sf closing year-to-date.

“It’s the center of the universe,” Mark Krison, a broker in the Phoenix office of CB Richard Ellis, tells GlobeSt.com. “When a company is locating in Phoenix and if they only have one store, one call center, one location, then they want to get it as central as possible.”

Aside from the airport, the Sky Harbor area is the geographic center of metropolitan Phoenix and home to the confluence of several major freeways. In the next five years, a light-rail system will run just north of the Sky Harbor area.

The Allred buildings are going up in the 550-acre Phoenix Sky Harbor Center Commerce Park, which runs from 16th Street to the airport. Jackson Street is situated to the north and Interstate 60, south. Tenants also have direct link to the fiber optic loop that runs through portions of the Valley.

Allred Sky Harbor Center’s first phase, completed in 2000, consisted of two buildings, totaling 130,000 sf. The fully leased structures house tenants such as America West Airlines, Level 3 and Global Crossing.

The City of Phoenix offered an advantageous ground lease, one of the enticements to move forward with the project, Krison says. Rents at the site are expected to be 20% lower than similar space in the area.

The Phoenix office of CB Richard Ellis, with brokers, Krison, Bob Crum and David Carder, are marketing the two new buildings. Hardison/Downey Construction is the general contractor for the project, designed by Blamer Architectural Group, both of Phoenix. In recent years, the Douglas Allred Co. has developed more than one million sf of industrial and office space in Phoenix, including Southbank and Eastbank business parks and Allred Cotton Center.

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