SCOTTSDALE, Arizona – As savvy commercial real estate investors flocked to relocate assets from distressed cities to smaller, thriving markets, Andrea Davis CRE in 2020 met the demand head on through 1031 Exchange investment opportunities for clients across the U.S.

“Buyers could not get what they wanted in Arizona,” Davis explained. “So many people in California are selling their assets and looking to place their money in Arizona. There is such a demand here. From warehouses to essential retail space and 1031 Exchange investments to cash deals, we guided our clients through it all in 2020.”

The Valley’s commercial real estate entered 2020 with tailwinds from a robust 2019. Then COVID-19 wreaked havoc on most every industry in Arizona and the U.S. During a time of year when most people avoid the Arizona heat, the pandemic drove an

abnormally high percentage of emigration out of major urban centers like San Francisco, Los Angeles, Chicago, and the Greater Washington D.C. Area to small and medium-sized cities like Scottsdale, Arizona; Durham, North Carolina; and Columbus, Ohio, Davis said. Entrepreneurs moved to Arizona from other suffering cities.

In September, another monumental shift happened. Commercial real estate investors were making similar choice as businesses and relocated their assets.

“In the Great Recession, investors wanted internet resistant, now they seek essential businesses that won’t ask for rent relief during government lockdowns,” Davis said.

A few investments that met those criteria are:

• 1031 Lightshade, Denver, Colorado $13.5 million, industrial warehouse, moving assets out of California;
• 1031 Tender Corp., Littleton, New Hampshire, $8 million, industrial warehouse, moving assets out of California;
• 1031 multi-tenant warehouse, Union Hills, Tennessee, $1.8 million, moving assets out of California;
• 1031 Dutch Bros, Las Vegas, Nevada, $2.25 million essential retail, moving assets out of California;
• 1031 Meineke, Las Vegas, Nevada, $1.75 million, essential retail, moving assets out of California;
• 1031 Value Truck, Buckeye, Arizona, $1.9 million, industrial, 7-acre truck stop.

“Arizona’s for sale inventory over the past 18 months, investment or owner/user, has been slim to nil. For businesses who want to control their destiny and stop leasing, purchase options are a challenge to come by,” Davis said.

“It’s the first time in 20 years of experience that multiple buyers are writing full price offers within days of a new office listing. Of course, this is a win for sellers, but a test of patience for buyers,” she said.

Notable Arizona closings in 2020 include 7302 E. Helm, which sold above asking; 11110 N. Tatum, which sold at full price; 8144 E. Cactus closed in two weeks; 8601 Butherus, a leading comp in the complex.

The sale price totaled $38.025 million ($253 PSF) and closed February 1, 2021.

Final phase of Phoenix manufacturing facility adds rail access within High Impact District

TOLLESON, Arizona – A project directed by Phoenix-based general contractor Stevens-Leinweber Construction (SLC) has expanded the Tolleson Rail Corridor with a new rail spur. The spur establishes direct railway access to a Georgia-Pacific (GP) Corrugated manufacturing facility, recently completed within Merit Partners’ Tolleson Corporate Park in Tolleson, Arizona.

The rail spur, and the GP Corrugated building, are part of a metro Phoenix High Impact District supporting a robust rail line presence required by many of the Valley’s most prominent manufacturing and distribution operations.

“Rail spur assignments are not as common as they used to be, now that so much of the Valley’s rail-accessible, infill land sites have been developed,” said Stevens-Leinweber Director of New Construction Erik Powell. “This project – and the Tolleson Rail Corridor – remind us of our railroad history and the vital role the rail lines still play in our industrial supply chain. We’ve enjoyed helping GP close this last loop at their Tolleson facility and maximize the full efficiency of their very modern operations.”

The new spur provides direct access from the Union Pacific rail line to a 100,000-square-foot manufacturing facility for GP Corrugated, one of the nation’s leading corrugated packaging manufacturers. As project lead, SLC directed extensive site mitigation along the spur line, including new underground retention, re-grading and precise material and soil compaction specifications required for the rail line installation.

“The expansion of Tolleson’s rail corridor helps local manufacturers capitalize on business opportunities, creating a positive ripple effect benefiting the entire region in the form of new jobs, more dynamic businesses and a more prosperous and diverse economy,” said City of Tolleson Mayor Juan F. Rodriguez.

During their interim operations, GP Corrugated utilized truck services for the inflow of manufacturing materials. The new spur allows the company to bring its oversized paper manufacturing materials in via rail, then transition the products to its manufacturing facility through a custom 20’ by 20’ high-speed dock door incorporated by SLC during GP’s tenant improvement build-out.

GP Corrugated joins more than 126 companies operating along the Tolleson Rail Corridor, representing almost 11,000 local jobs. In addition to rail access, the Corridor provides quick access to the I-10, Loop 101 and new Loop 202 extension. The Goodyear Airport is within a 14-minute drive.

GP Corrugated is situated within a larger, 250,000-square-foot building also occupied by MiTek, a global supplier of services and products to the construction sector. SLC was the ground-up general contractor for the shell building and was the tenant improvement contractor for the GP Corrugated and MiTek build-outs. MiTek also occupies an adjacent, 259,200-square-foot building within the same corporate park.