Industrial demand remains high following a record 2017, with the Sky Harbor and Southeast Valley submarkets experiencing most of the activity since the last downturn, but demand is outpacing the current supply, spurring the adaptive reuse and modernization of existing buildings to keep up with growing demands and evolving tenant needs and to optimize the industrial landscape for future growth.
Capitalizing on this demand are Chris McClurg and Ken McQueen, principals at Lee & Associates Arizona, who teamed up with seven developers to build eight different speculative projects, totaling nearly three million square feet of new industrial space at previously overlooked development opportunities in the Sky Harbor and Southeast submarkets. Of the eight projects in various stages of development, approximately 1.2 million square feet will consist of the redevelopment and adaptive reuse of older sites and buildings for prospective new tenants.
“Since 2012, the Sky Harbor and Southeast Valley submarkets have seen just under six million square feet of speculative warehouse product delivered,” explains Ken McQueen, a principal at Lee & Associates Arizona. “This spec product is nearly 70-percent occupied and we are now seeing the second phase of spec product being delivered to the market to keep up with the demand.”
Chandler Airport Center – completed
Class A industrial park with 210,000 square feet in two buildings, partly leased, plus a 3.4-acre pad site that’s available for sale or build-to-suit project.
Metro East Valley Commerce Center II – starting soon
Located in Mesa on 21 acres, the two new industrial buildings will be 155,480 and 208,100 square feet each with divisibility to 20,500 square feet.
Prologis I-17 Logistics Center – under construction
This premier development in the Sky Harbor market has redeveloped an obsolete concrete batch plant into more than 900,000 square feet of state-of-the-art industrial product.