Our Industrial Market Is Booming!

How this CRE sector is building jobs & more

by RaeAnne Marsh

“We are seeing an industrial technologies renaissance, led by semiconductor companies like Taiwan Semiconductor Manufacturing Company building a massive campus in north Phoenix and Intel expanding with Fab 52 and Fab 62 in the southeast Valley that are driving a whole ecosystem of investment,” says Chris Camacho, president and CEO of Greater Phoenix Economic Council. He notes we also have such stalwart industries as e-commerce and industrial manufacturing as well as distribution moving into the southwestern U.S., pointing out that Greater Phoenix is the number two growing market for industrial development, behind only Dallas-Fort Worth. “We’re a large-scale market where people want to be, from a lifestyle perspective to pro-business policies, the region is home to a collaborative and supportive ecosystem that has embraced growth and we’re seeing the results of that today in terms of industrial demand.”

Industrial manufacturing has, historically, been a huge contributor to Greater Phoenix jobs, and Camacho points to the 138,000 manufacturing jobs in the region now and continuing growth in advanced manufacturing. Employment in this sector is expected to increase faster in Greater Phoenix than in any other competitor markets, adding 5,400 jobs over the next five years. “Of the 250 companies from various sectors in GPEC’s business pipeline actively evaluating Greater Phoenix for expansion — representing a potential regional investment of $90 billion and 49,000 new jobs — 177 of those companies are industrial,” Camacho says, adding, “With 30,000 students enrolled in engineering programs across Arizona and investments in STEM education being made across Greater Phoenix, the pipeline of talent feeding into this ecosystem will fuel this growth for years to come.”

Sandra Watson, president and CEO of Arizona Commerce Authority, reports that in 2021 alone, the ACA successfully won more than 90 competitive projects from companies that committed to creating more than 23,500 projected new jobs while investing more than $27 billion in the state. Some notable projects are Intel’s $20 billion expansion in Chandler, KORE Power’s battery manufacturing facility in Buckeye, ElectraMeccanica’s electric vehicle assembly facility in Mesa and United Aviate Academy’s training facility in Goodyear; the state also scored CP Technologies’ North American headquarters in Prescott and Leonardo Electronics’ semiconductor laser manufacturing facility in Tucson.

“Workforce development is a top priority as more companies are establishing a presence or expanding in Arizona,” Watson says, citing as example Drive48, an automotive assembly training facility in Coolidge, a unique collaboration among government, industry and academia to bolster Arizona’s workforce training efforts. “The ACA worked with Lucid and Central Arizona College to launch Drive48 in 2021, and since then, 1,700 Lucid employees have been trained through Drive48.”

According to a report from CommercialSearch last month, Phoenix was only slightly behind Dallas-Fort Worth for projected industrial completions (36.3 million square feet and 38 million square feet, respectively, currently under construction), about 10 million square feet ahead of Indianapolis, Inland Empire and Chicago and well ahead of the other cities in the nation’s top 20 industrial markets. In fact, demand for industrial space in Phoenix has spiked considerably in recent years, with low vacancies and major investments contributing to the metro’s role as a regional distribution and manufacturing center.

CBRE’s Phoenix Industrial Market report for Q1 2022 cites 38 buildings delivered in that quarter, totaling 8.0 million square feet — more than half the total delivered in all of 2021 (14.1 million square feet). At the same time, net absorption hit 8.9 million square feet, which the report notes is a record high level of net absorption recorded in a single quarter for Metro Phoenix.

According to CBRE’s report, construction activity remained strong, with 26.6 million square feet under construction to start 2022. We can expect to see a high volume of construction continue through 2022. Out of all under-construction product, 17.7 million square feet, or 66.5%, is in the Southwest Valley. Construction activity is exploding in the Southeast Valley as well, specifically in the Phoenix Mesa Gateway area where 5.3 million square feet is expected to come online in the future. Currently, 35.2 % of the product under construction is committed, showing how much demand there is in the market for new construction.

Colliers in Arizona’s Q1 2022 industrial market report for Phoenix also examines the sector’s impact on jobs. According to Collier’s report, Phoenix’s industrial labor market is running parallel to its commercial growth, which “remains red hot and consistently performs better each quarter.” As of February of this year, Metro Phoenix had grown its labor force by 89,600 employees over February of last year, a 4.1% increase. Over the same period, transportation, warehousing and utilities supersector jobs increased by 40.3%, manufacturing jobs by 3.9% and construction jobs by 3.0%.


Valley industrial projects have become much more elaborate and include many more amenities. See a few key projects listed by area of the Valley —north, east, west and south.


NORTH

Image courtesy of TSMC

TSMC Arizona

Location: North Phoenix
Project start: April 2021
Project completion: Operations will start in 2024
Project cost: TSMC announced in May 2020 that it plans to spend $12 billion on leading-edge semiconductor fab in Phoenix, Arizona. 

“The Arizona state government, the Phoenix Mayor’s office, as well as the Arizona Commerce Authority and the Greater Phoenix Economic Council were excellent resources to us in our evaluation of the state. They have been very supportive and enthusiastic about our planned growth in Arizona,” says a TSMC spokesperson, citing, in addition to strong state incentives, investment options (such as land, green energy) and also effective and efficient labor and environmental regulatory management policies aligned with science-based global benchmarks. “Another attractive feature of Arizona was the existing semiconductor supplier infrastructure. The greater Phoenix area also offered our employees strong quality-of-life factors, ranging from cost of living, good weather, social and outdoor activities and high-quality K-12 and higher education programs.” 

TSMC purchased a plot of land that was more than 1,100 acres. According to the TSMC spokesperson, the company has only confirmed plans to build this currently under-construction five-nanometer semiconductor fab. A “fab” (short for fabrication) is a very unique type of building. It is a massive complex that runs day and night. The cleanrooms within TSMC’s GigaFabs in Taiwan are about 25 standard soccer fields in size. Some of the equipment can weigh up to 60 tons. 

“The project will create approximately 2,000 new high-tech jobs and generate thousands of additional jobs in the state for suppliers and other companies within the semiconductor industry,” says the spokesperson, and notes that, in addition, this project is expected to influence the expansion of the semiconductor supplier industry within Arizona bringing the state more economic upside.

Image courtesy of Sunlit Chemical

Sunlit Chemical Manufacturing Facility

Location: North Phoenix
Project start: January 20, 2022
Project completion: Early 2023
General Contractor: Brycon
Architect: Brycon
Engineering/Design Firm: Brycon
roject cost: $100 million

“Sunlit is excited to expand into Arizona and this new milestone marks Sunlit’s commitment to our partners that we are ready to expand our reach beyond Asia and set sights on the global front,” said Bryan Lin, President of Sunlit Group. “This new facility enables Sunlit to be the leading main supplier of high purity hydrofluoric acid to semiconductor fabs in the U.S.” The company contributes to 75 percent of the world’s market share in producing sodium fluoride in the oral care industry and is one of the only two producers globally to obtain US FDA approval.
The 900,000-square-foot facility located on 17 acres in north Phoenix will produce hydrofluoric acid and other high-purity-grade industrial chemicals in the first phase, which will be operational in early 2023. Phase 2, involving raw material purification, will be operational in 2025. The facility will adopt the vertical integration manufacturing process, streamlining operations.
Says Phoenix Mayor Kate Gallego, “Sunlit’s decision is a testament to Phoenix’s advancement as a national and global leader in the semiconductor industry. Its new fabrication facility in north Phoenix adds to the quality jobs and research excellence significantly expanding in our region.”

Image courtesy of Dermody Properties

LogistiCenterSM at Copperwing

Location: Northern Parkway and Dysart Road, El Mirage
Project start: Phase I will break ground Q4 2022
Project completion: First buildings available for occupancy as soon as Fall 2023
Developer: Dermody Properties
Architect: HPA Architecture
Other partners: Pat Feeney, Executive Vice President, SIOR, CBRE Phoenix; Daniel Calihan, Executive Vice President, SIOR, CBRE Phoenix

“The West Valley submarket features two of the top 10 fastest growing cities in the U.S.: Glendale and Buckeye,” says Ryan Sikorski, vice president of national accounts at Dermody Properties, noting that the Phoenix metropolitan area is one of the fastest-growing regions in the country and led the entire U.S. in large-city population growth from 2010 to 2020. 

LogistiCenterSM at Copperwing is situated within this West Valley submarket, with immediate access to the newly developed Northern Parkway Expressway, approximately 3.5 miles from the Loop 101 and Loop 303 freeways. Says Sikorski, “The park is expected to attract large distribution users and companies with manufacturing operations because of the area’s strong labor base and convenient access to Phoenix and most western markets, including the Southern California region and Los Angeles ports.” 

The locations attractions that Sikorski cites are the access that the property provides to all of the southwestern U.S. within a two-day drive; the area’s abundant labor pool, with a workforce of nearly 850,000 people within 20 miles; and the fact that the area is a popular location for data center users, as the region has an attractive power grid, low catastrophic risk and abundant fiber networks. Also, he says, “The property is within an approved Foreign Trade Zone, meaning companies within the park that are active users of FTZ can receive up to a 72% reduction in real estate and personal property taxes.” 

The 961-acre site will feature approximately 10 million square feet of modern distribution space, with individual buildings accommodating a wide range of user sizes up to 2.8 million square feet. “The park will be built to best-in-class standards, through sustainable design and construction, to meet the supply chain requirements of the most innovative companies,” says Sikorski, who notes, “This will be one of the largest industrial parks in Arizona history.”

Approximately 375 acres of land within the industrial park is currently being offered for sale to third-party owner/users and build-to-suit customers. Dermody Properties also intends to bring new electric power, water and sewer sources to the site along with substantial road improvements throughout the park.

“This development will have a significant impact on the Phoenix market, including an influx of jobs and economic benefits,” says Douglas A. Kiersey Jr., president at Dermody Properties. “For Dermody Properties, this investment is consistent with our strategy of sourcing projects dedicated to serving the distribution network needs of both new and existing customers.”

In fact, as the West Valley has emerged as a hub for the supply chains of top global companies, regional and local businesses, and third-party logistics providers, Sikorski sees the LogistiCenterSM at Copperwing supporting further growth in the West Valley as users continue to invest in logistics facilities, technology and human capital that drive efficiency within their supply chains.

“In addition to the buildings designed with Class A features, infrastructure improvements along Dysart Road, Olive Avenue, Joe R Ramirez Road and Northern Parkway will attract both employers and labor looking for opportunity within a newly constructed state-of-the-art industrial park setting,” Sikorski says. “The aforementioned infrastructure improvements and successful development of the LogistiCenterSM at Copperwing will attract other businesses and hospitality amenities to this community to service the growing employment base. And the proximity of this project to Luke Air Force Base will be attractive to occupiers within the park looking for skilled veteran labor.”


WEST

Image courtesy of JLL

G303

Location: Fronting Loop 303 between Glendale Avenue and Bethany Home Road, Glendale
Project start: March 2020
Project completion: Phase I completed Q3 2021; Phase II is scheduled to complete Q4 2022
Developer: Hines
Builder: Graycor
Architect: Ware Malcomb
Other partners: JLL (brokerage)
Main tenant: Mlily
Construction cost: $74 million

Located immediately off Loop 303 between Glendale Avenue and Bethany Home Road, the site offers direct access to two full-diamond interchanges and is within one of the hottest logistics corridors in the nation, at the center of millions of residents, a deep pool of skilled employees, and within a day’s drive to Southern California’s ports of Los Angeles and Long Beach.

When completed, the 1.25-million-square-foot, state-of-the-art manufacturing and distribution facility will be the largest single-building industrial development to date in the U.S. by Hines. The building features 40-foot clear height, 60-foot speed bays, abundant dock-high loading doors, insulated overhead doors and highly functional footprints. With a growing demand for amenities in premier new Class A industrial developments, G303 also has a fenced basketball court and outdoor covered patio with picnic tables. The cross-dock facility will have extensive power and has a sleek exterior design.

G303 was designed as a speculative building able to combine twin buildings into a single structure. The G303 site was also carefully planned to support such an expansion. This expandability of G303 was key to attracting global mattress firm Mlily; additionally, the completed Phase 1 allowed the company to occupy and begin operations sooner than any other alternative.

Mlily is rapidly expanding its Arizona footprint. G303 allows them to continue that expansion, which includes hundreds of local jobs. Bill Honsaker, managing director at JLL Phoenix, points out the addition of Mlily to this corridor also continues to strengthen the mega-tenant base of the West Valley industrial market. 

Image courtesy of BET Investments

Buckeye I-10 Logistics 

Location: Along Buckeye’s I-10 frontage Freeway, just west of Verrado Way, Buckeye
Project start: Phase I already begun, Phase II will start Q3 2022
Project completion: Phase I before end of 2022
Developer: BET Investments
Builder/General Contractor: Layton Construction
Architect: Butler Design Group
Engineering/Design: Hilgart Wilson Engineering

BET Investments has started its first phase of a 145-acre project that will be one of the largest industrial developments in Buckeye’s history. Buckeye Mayor Eric Orsborn sees this is as a statement of confidence in Buckeye’s future, saying, “As the fastest-growing U.S. city in the nation, Buckeye is at the forefront of meeting the infrastructure and transportation needs of its residents.” 

“That’s why BET Investments has invested heavily in Buckeye for the last 15 years,” says Scott Moore, executive vice president of the Arizona division at BET Investments. “Our industrial complex will support Buckeye and the West Valley’s expansion by providing new jobs at a location that is important to the North American supply chain. Product can be transported to consumers in Southern California, Nevada, New Mexico, Denver and Utah all within a day’s drive.”

The industrial park will be constructed with more than 2.2 million square feet of industrial space. The Phase I building will be 641,000 square feet; Phase II, approximately 1,150,000 square feet, adjacent to the I-10 freeway; Phase III, 450,000 square feet, adjacent to Van Buren. 

Image courtesy of CapRock Partners

CapRock West 202 Logistics

Location: Within the southeast quadrant of the I-10 Freeway and Loop 202, at thev northeast corner of N. 59th Avenue and W. Van Buren Street, Estrella.
Project start: Groundbreaking was announced February 8, 2022
Project completion: Phase I completion anticipated in Q1 2023; timing of Phase II TBD
Developer: CapRock Partners
Builder: Willmeng Construction
Architect: CAA Architects
Other partners: Don MacWilliam and Payson MacWilliam, both executive vice presidents at Colliers International and who assisted CapRock initially in securing the CapRock West 202 Logistics development site, are leading the project’s leasing efforts.

CapRock West 202 Logistics is a speculative infill industrial development in central Phoenix. Its position within the southeast quadrant of the I-10 Freeway and South Mountain Freeway/Loop 202 will enable CapRock West 202 to provide a new level of access and efficiency for businesses with a last-mile delivery strategy, according to Jon Pharris, co-founder and president of CapRock Partners.

“While most of the Valley’s comparable new industrial product is located in the outer region of the Valley, along Loop 303, CapRock West 202 Logistics is centrally located, adjacent to two key transportation routes. It is the first large-scale industrial complex to be built along the recently completed South Mountain Freeway,” Pharris says. “Future tenants of the new complex will be able to reach most of the Valley within a 45-minute drive. They will also be within minutes to Phoenix Sky Harbor International Airport and Downtown Phoenix.” 

At 3.4-million square feet, CapRock West 202 Logistics is the largest industrial development in Phoenix’s in history. It comprises eight state-of-the art buildings ranging from 228,000 to 1,065,000 square feet across 183 acres. Phase I will include the development of approximately 140 acres, delivering 2.5 million square feet of modern industrial warehouse space across five Class A buildings with clear heights ranging from 36 feet to 40 feet. Phase II will include an additional three buildings totaling 827,330 square feet on 43 acres. The project is attracting global and local tenants with warehousing needs that range from large-scale to last-mile distribution strategies.

“Phoenix is now a premier destination for Fortune 1000 companies looking to increase their inventory and distribution capabilities, supported by the Valley’s rapid population growth, strong economic fundamentals, business-friendly environment, temperate climate and lack of available industrial product throughout California’s major markets,” Parris says, noting that Phoenix’s geographic position, within a single-day’s drive to primary consumer markets and logistics hubs in Southern California, Dallas, Denver and Salt Lake City, has led it to become a critical node in the North American supply chain. 

“CapRock West 202 Logistics will surpass all other large-scale industrial projects within Phoenix’s city limits by more than 1 million square feet,” Pharris says. “As the largest state-of-the-art industrial complex in Phoenix, CapRock West 202 Logistics will be an impactful source of Phoenix employment opportunities and support the Valley’s economic expansion as the fastest growing city in the U.S.”

Image courtesy of VanTrust Real Estate

Peoria Logistics Park 

Location: 75th & Northern avenues, Peoria
Project start: Phase I start March 2022
Project completion: Phase I completion early 2023; future phases TBD
Developer: VanTrust Real Estate
Builder/General Contractor: Willmeng Construction (Phase I)
Architect: Butler Design Group
Major tenants: Undisclosed Fortune 500 company (Phase I)

“With the massive amount of expansion in the West Valley, Peoria Logistics Park is now considered an infill location, so we knew the site would offer industrial users a central location to reach their customers Valley-wide,” says Jenna Borcherding, director of development at VanTrust Real Estate, noting that access to the Loop 101 and Grand Avenue and nearby amenities, including restaurants, hotels and the Westgate Entertainment District, are attractive to users as well as Peoria’s skilled workforce and fast-growing population. 

Peoria Logistics Park represents the largest Class A industrial park to be developed in the Peoria submarket, according to Borcherding. The 150-acre site offers ultimate flexibility to users seeking Class A industrial space ranging from 100,000 to more than 600,000 square feet. At project completion, the Park could accommodate upwards of 2 million square feet. “We are really focused on maintaining flexibility within our development plans, which allows us to respond to build-to-suit requirements that may not fit within speculative development projects,” she says. “Industrial demand is robust, so offering a wide array of building sizes and configurations to meet the needs of today’s users has given the Park a competitive edge in the market.”

Borcherding sees Peoria Logistics Park having a tremendous impact on the community’s long-term prosperity by bringing new industries and jobs to support the skilled workforce and fast-growing population. VanTrust kicked off the first phase of development in March of 2022 with a 157,000-square-foot distribution center for a Fortune 500 company, which is expected to open in early 2023. Says Borcherding, “We’re already working with other prospects for the Park and look forward to announcing future phases of development.” 

Image courtesy of Lincoln Property Company

Park303 Phase 2

Location: Northeast corner of Loop 303 and Glendale Road, Glendale
Project start: February 2022
Project completion: March 2023
Developer: Lincoln Property Company
Builder: Layton Construction
Architect: Butler Design Group
Project Value: $540.8 million; $228 per sq. ft.

The Park303 site (210 acres in all) was selected for its direct frontage to the Loop 303, offering freeway signage opportunities and convenient ingress and egress via two full-diamond freeway interchanges, according to LPC Desert West senior executive vice president David Krumwiede. “That location places this project within a single-day truck haul to more than 33 million consumers and less than five hours to the ports of Los Angeles and Long Beach. It also is one mile from the Northern Parkway, a 12.5-mile, high-capacity roadway offering expedited distribution routes and helping the area’s skilled employees (also a site selection factor) to avoid common rush hour traffic delays on Interstate 10.”

Park303 Phase 2 totals 2.5 million square feet in three state-of-the-art industrial buildings. Like Phase 1, two of the Phase 2 buildings can quickly convert into a single, 1.2 million-square-foot facility (with 104,052 square feet of infill space) to meet the needs of a major single user. Building features include 40-foot clear height, touchless technology, generous power, 25-foot-tall glass entries and 5-foot by 10-foot clerestory windows on all elevations, which provide access to sky views and shifting natural light, shown to increase productivity and mental focus. Indoor/outdoor amenities include a basketball/pickleball court, barbeque station, shaded outdoor eating area and employee collaboration spaces. Collectively, Phase 2 will provide 430 dock doors, 778 trailer stalls and more than 1,556 parking stalls (all expandable). All buildings are Foreign Trade Zone capable.

“By pushing the bounds of technology and amenities, this project is positioned to attract top-tier tenants with the potential to bring hundreds of high-quality jobs to the Valley,” Krumwiede says.  “Its amenities also allow companies to show their appreciation for their teams by making the workday more comfortable and enjoyable. With demand for industrial space high in all sectors, Park303 Phase 2 delivers not only the present but also the future of logistics real estate.”


SOUTH

Image courtesy of ViaWest Group

Converge

Location: 15175 S. 50th St., Phoenix
Project start: February 2, 2022
Project completion: Q1 2023
Developer: ViaWest Group
Builder/General Contractor: Willmeng Construction
Architect: Toby Rogers and Jeff Cutberth at Butler Design Group
Engineering/Design Firm: Kimley Horn
Other partners: Prospect Ridge

Explaining that it is nearly impossible to find highly visible, infill interstate frontage in Metro Phoenix anymore, Alex Boles, director of investments and development at ViaWest Group, says, “This project is one of the rare A+ located infill locations left. There is a quarter mile of I-10 frontage at this site and it sits less than a mile from the I-10/202 interchange. The rectangular shape of the site allowed for easy site planning while maximizing utility and lot coverage at the same time. I believe that this will be the best industrial product built in Phoenix this year.” 

Converge will consist of three general Class A industrial buildings totaling approximately 512,710 square feet, with 3,600 amps (expandable) per building. Building A, at 210,670 square feet, has 235 parking stalls, 66 trailer parking stalls, a 240-foot building depth, 38 dock doors and four drive-ins. Building B, at 140,941 square feet, has 243 auto parking stalls,180-foot building depth, 39 dock doors and six drive-ins. Building C, at 159,221 square feet situated on 28.6 acres, has 269 auto parking stalls, 210-foot building depth, 46 dock doors and four drive-ins. 

“Leasing this land from the Kyrene School District benefits the community through these additional funds being distributed throughout the school system and improving education in the Southeast Valley,” says Steven Schwartz, ViaWest Group founding partner. “Because of the phenomenal location and our plan to build some of the highest-quality industrial buildings in Phoenix, we started seeing leasing activity with large, notable companies before we even broke ground.” He expects a project of this quality and scale will generate significant and sticky job opportunities created by the project’s future tenants. 

Image courtesy of ViaWest Group

Airport 48

Location: 3232 S. 48th St., Phoenix
Project start: February 25, 2022
Project completion: Q4 2022
Developer: ViaWest Group
Builder/General Contractor: Stevens Leinweber Construction
Architect: Jeff McCall with McCall & Assoc.
Engineering/Design Firm: Kimley Horn
Major tenants: Southern Carlson, Monterrey Tile

The site, one of the last remaining available infill sites in Central Phoenix, is also located in an Opportunity Zone. This, says Steven Schwarz, founding partner of ViaWest Group, “provides tax incentives to owners to develop buildings in lower income areas, which was an additional incentive as an organization headquartered in Phoenix to do what we can to help the community.” He notes the location is ideally located minutes from Sky Harbor International Airport with proximity to multiple freeways and a strong labor pool. 

Airport 48 is an approximately 146,526 SF state-of-the-art Class A industrial warehouse with A-1 zoning situated on 9.98 acres. It has 28-foot clear height, a secure truck court, 32 dock-high doors and 12 grade-level doors. The project has 3,000 amps power. Parking ratio is 1.43 spaces per 1,000 square feet.

“We have seen interest from several national and regional suppliers of commodity and specialized goods interested in the Valley-wide highway accessibility this site provides,” says Todd Weiss, ViaWest COO. “Most users and potential users have been looking for last mile-type distribution with a light manufacturing or warehousing component and 5 to 10% office.”

Image courtesy of Creation

Midway Commerce Center

Location: Chandler
Project start: Construction expected to begin early this summer
Developer: Creation
Builder: LGE Design Build
Architect: LGE Design Group
Other partners: J.P. Morgan Global Alternatives 

Chandler was chosen as the location for Midway Commerce Center because of its freeway access and visibility along with its proximity to an educated workforce and excellent retail amenities, according to Josh Zemon, managing principal of Creation. 

Midway Commerce Center is a 301,994-square-foot industrial building in Chandler. With construction beginning this summer, Midway Commerce Center will incorporate building features required by modern light-industrial tenants, including 32-foot clear height, generous truck court depths, clerestory windows, enhanced insulation and electric vehicle charging stations.

“Midway Commerce Center is the exact type of industrial product that prospective occupants are looking for and having a difficult time finding in the southeast Valley,” Zemon says, noting the southeast Valley light-industrial vacancy rate is at historic lows for existing product. “Combine that with% of projects under construction already being preleased, it is becoming increasingly difficult for companies to find space. Midway Commerce Center will add much-needed inventory to the market and will attract premier employers that will want to take advantage of this location and access to a talented workforce.”


East

Image courtesy of Creation

Park Algodon

Location: Loop 101 and Indian School Road, Phoenix
Project start: construction will start later this year
Developer: Creation
Builder: LGE Design Build
Architect: LGE Design Group
Other partners: J.P. Morgan Global Alternatives

Park Algodon’s location enjoys convenient access to the entire southwest Valley, northwest Valley and north Phoenix, thanks to the new Loop 202 (South Mountain Freeway) extension, notes Josh Zemon, managing principal of Creation. This site can also distribute to the southeast Valley with ease. “Moreover, says Zemon, “Park Algodon gives potential occupants the ability to attract employees from a wide radius as a result of the easy freeway access to the site. When Creation looked at the alternatives, this location is one of the final infill sites in the southwest Valley with freeway frontage that can be simply acquired.” 

Park Algodon is a light-industrial development consisting of two parcels — the northwest and southeast corners of Loop 101 and Indian School Road. Square footage of the northwest parcel is 1,330,080 square feet; square footage of the southeast parcel is 914,160 square feet. Park Algodon will feature best-in-class features that are required by light-industrial occupants, including ample clear height, generous loading, enhanced site maneuverability, robust insulation and reinforced building slabs. “Beyond having the best of the market building specs, these buildings will boast enhanced architecture design that keeps community, freeway, visibility and legacy at the top of mind,” Zemon says. “As placemakers, Creation is not interested in developing a ‘vanilla’ project that falls flat.”

Zemon cites an economic analysis study prepared by Elliot D. Pollack & Company predicting Park Algodon to have a total economic output and wage impact totaling $547.9 million and total tax revenues to the City of Phoenix totaling more than $9.1 million. “This section of the Loop 101 corridor has always been targeted for development of employment centers, which is exactly what Park Algodon will provide,” Zemon says. “This development will introduce much-needed light industrial inventory into the market and will attract top-tier employers that will provide high-quality employment opportunities for residents.”

Image courtesy of Lee and Associates

Lot 37 Hangar 

Location: Phoenix-Mesa Gateway Airport, Airport side
Project start: December 2019
Project completion: December 2020
Developer: Wetta Ventures
Builder: Fleming Complete
Architect: Larson Associates Architects
Main tenant: Gulfstream Aerospace Corporation
Project cost: $13 million

There was a lack of commercial aircraft hangars throughout the country, especially at commercial airports, making this location very attractive. Plus, Phoenix-Mesa Gateway Airport is the No. 1 economic driver in Mesa and boasts five higher educational institutions within two miles, providing tremendous workforce development. 

This is a Class A “MRO” commercial aircraft hangar with two bays, able to fit two Boeing or Airbus narrow-body aircraft. It features office space and a storage yard and is located on the taxiway.

Providing an employment impact from this project, Gulfstream will have approximately 100 employees in high-paying jobs.

Image courtesy of ViaWest Group

Advanced Industrial Park

Location: Southwest corner of Pecos Road and Sossaman Avenue, Mesa
Project start: May 15, 2022
Project completion: Q1 2023
Developer: ViaWest Group
Builder/General Contractor: ClayCo
Architect: Cawley Architects
Engineering/Design Firm: JMC
Other partners: Nicola Wealth Real Estate

Noting the property was purchased with a fully approved, permit-ready plan set, ViaWest Group development manager Rodney C. Boden says, “The ability to bypass the lengthy municipal review process will allow us to deliver the buildings ahead of the many projects that are currently in the planning phase of development.” He points out that there is pent up demand in the Mesa Gateway submarket for industrial product in the entire range of suite sizes this project can accommodate. 

ViaWest plans three single-loaded Class A industrial buildings on the 20.77 acres. Building A will be 122,690 square feet, building B will be 131,737 square feet and building C will be 80, 639 square feet, for a total rentable square footage of 335,066. Constructed of tilt-up concrete, buildings will have 32-foot clear height, steel deck roof structure, ESFR sprinklers, 5-10% office with ability to increase office square footage if desired, 3,000-4,000 amps per building. The parking ratio is 1.71 spaces per 1,000 square feet.

“These buildings are designed for light manufacturing and distribution tenants with the intention of bringing technical, skilled job opportunities with wages commensurate to their higher skills,” says Danny Swancey, a partner at ViaWest Group. “Suppliers and support systems for Skybridge and Mesa-Gateway Airport are likely candidates for tenancy at Advanced Industrial Park. Also, chip manufacturing (TSMC, for example) and tech company (Intel, for example) suppliers continue to fill the pipeline of users seeking space.”

Image courtesy of EastGroup

Gateway Interchange

Location: Northwest corner of Hawes Road and Loop 202, Mesa
Project start: Phase I begins Q3 2022
Project completion: Phase I will be completed Q2 2023
Developer: EastGroup
Builder: Willmeng Construction
Architect: Butler Design Group
Other partners: Brokerage by Pat Harlan, Steve Larsen and Rick Collins at JLL

“This is arguably one of the East Valley’s best parcels for commercial development but was not appearing in traditional site selection searches due to multiple ownership entities, including a parcel owned by ADOT that had to be purchased at auction,” says EastGroup vice president Mike Sacco. He credits the creativity and diligence of the team allowing EastGroup to secure and consolidate this parcel, which he says was chosen for its freeway-fronting location, the area’s highly sought-after educated workforce and its growing foundation of advanced manufacturing and supply-chain users.

The speculative development will provide 655, 400 square feet in seven Class A buildings on 50 acres, with 2,600 square feet of Loop 202 freeway frontage. Buildings feature 28- to 32-foot clear height, abundant power, full concrete truck courts, dock-high and ground-level loading, LED warehouse lighting, ESFR sprinkler systems and glass roll-up doors leading out of break rooms to covered patio areas. The project also includes six outdoor amenity nodes that are interconnected by trails and feature patio tables and chairs for outdoor dining, and turf areas for cornhole and other outdoor games.

With the tremendous demand in Mesa’s Gateway area for large plate industrial space and Gateway Interchange’s strategic location, the City of Mesa’s economic development department believes this development has the ability to attract high-quality jobs and economic stability from a wide range of users, including aerospace, electric vehicle and advanced manufacturing companies.

A Queen Creek development from ES America

Location: Queen Creek
Project start: mid to late 2022, following the April 19th land auction
Project completion: estimated for December 2024
Developer: ES America (LG Energy Solution Ltd. is principal of ES America; the Arizona Corporation Commission identifies electronics giant LG Energy Solution as the sole member in the LLC.)
Main tenant: LG Energy Solution Ltd. (owner-occupied)
Project cost: $2.8 billion

While there is often a publicly available project code name for developments in the early stages of agreement, representatives from both Pinal County and Queen Creek cited confidentiality and economic development considerations and declined to provide any identifying details. 

While the project is not specifically named in the Board materials, industry watchers suspect it is likely a 1-million-square-foot battery plant that will support a recent agreement between electric semi-truck manufacturer Nikola Corp. and electronics giant LG Energy Solution Ltd.

This project will create 2,800 full-time jobs. Plus, direct revenues for the town are estimated to be about $25 million for one-time revenues such as construction sales tax and annual revenues between $3 million and $4 million once the plant is operating.

Image courtesy of Wharton Industrial

TheHub@202

Location: Mesa
Project start: Q2 of 2022
Developer: Wharton Industrial
Other partners: Financing for the project provided by MSD Capital, LP, the family office of Michael Dell 

“Wharton is a strong believer in the growth of the industrial market in the Intermountain West region as more companies and individuals relocate for a more hospitable business climate and better quality of life. Markets like Mesa are becoming part of the ‘digital desert’ where forward-thinking businesses such as electric vehicle makers, social media companies, aerospace, and chip manufacturers and more are flocking,” says Peter C. Lewis, chairman of Wharton Industrial. “The strategy to invest in this region is emblematic of our 35-year corporate philosophy of focusing on emerging markets poised for significant growth.” 

The site is among the last large contiguous land parcels remaining in the area and is centrally located in the highly desirable Southeast Valley submarket of Metropolitan Phoenix — one of the fastest-growing industrial markets in the country and poised to lead the nation in industrial rent growth over the next five years. The area has an extraordinary collection of “new age” companies such as Google, Facebook, Microsoft, Apple, Lucid, Taiwan Semiconductor and Apple attracted by the area’s talented labor pool, low-cost living, favorable business climate and the ability to service major West Coast population centers.

Wharton Industrial plans to invest more than $200 million into the 101-acre site to develop an 11-building, 1.5-million-square-foot Class A industrial park. The buildings will range in size from 65,000 square feet to 270,000 square feet and will feature 28- to 32-foot clear heights, 73 trailer parking spaces, 60-foot speed bays and 1,429 car parking spaces.

Image courtesy of CRG

The Cubes at Mesa Gateway 

Location: Between E. Pecos and E. Germann roads, Mesa
Project start: Q2 of 2022
Project completion: The full site is expected to be completed in late 2024
Developer: CRG
Builder/General Contractor: CRG’s parent company, Clayco
Architect: Lamar Johnson Collaborative
Engineering/Design Firm: Lamar Johnson Collaborative
People/companies involved: Shawn Clark, president of CRG; Mark Sonnenberg, CRG senior vice president and partner; Adam Baugh, partner and zoning attorney at Withey Morris led the entitlement efforts; JLL managing director Steve Larsen represented CRG in the land acquisition; JLL managing director Pat Harlan and Senior Vice President Jason Moore to handle leasing for the project
Major tenants: Lowes; JX Nippon
Project cost: $300 million

Strategically located between E. Pecos and E. Germann roads in southeast Mesa, The Cubes at Mesa Gateway is five miles from the Phoenix-Mesa Gateway Airport and just south of the now under-construction AZ 24 freeway expansion, which will offer direct access to Loop 202 and the greater Phoenix area. “The Cubes will be a tremendous addition to southeast Mesa and the region, providing more jobs and more business development opportunities in the fastest-growing part of the East Valley,” says Adam Baugh, partner and zoning attorney with Withey Morris PLC, who led the entitlement efforts. “With its proximity to Gateway Airport and the nearby freeways, this is the perfect location for a major project like this.”

The Cubes at Mesa Gateway will bring up to four million square feet of speculative and build-to-suit space to a 268-acre site in Mesa, 20 miles southeast of Phoenix. According to Baugh, this will be the largest master-planned, development-ready industrial park delivered in the southeast Valley hyper-growth submarket of Phoenix, which is expected to add more than 120,000 residents by 2025.

Catering to a wide range of users in bulk distribution, e-commerce fulfillment and specialized manufacturing, the development will be constructed by CRG’s parent company Clayco. Offsite infrastructure improvements to all four sides of the property will begin immediately and include road widening, installation of traffic signals and utility expansion. The first phase of vertical construction is slated to begin in the second quarter of 2022, with delivery of the first building expected to coincide with the completion of the AZ 24 expansion in the fourth quarter of 2022. The full site is expected to be completed in late 2024. 

Says Baugh, “The southeast Valley is booming, with strong gains in high-tech industrial sectors such as semiconductor, aerospace, electric vehicle, defense and data centers, but most of the area’s current industrial inventory caters to smaller users. The Cubes at Mesa Gateway will fill the need for a large, multi-phase, development-ready industrial park to satisfy these growing requirements.”

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