Colliers International Negotiates Sale to Local User/Investor

Scottsdale, AZ – Colliers International in Greater Phoenix has negotiated the $2.1 million ($141.38 PSF) sale of an industrial/flex building at 16655 N. 90^th St. in Scottsdale.

“The buyer was very interested in acquiring this industrial property because they own the building next door,” says Greg Hopley, executive vice president with Colliers International. ”This was a strategic purchase by the company to lock down additional square footage for their future expansion.  Cabral Holdings purchased this property several years ago and was very pleased to sell the building to their next door neighbor.”

Desert Real Estate Holdings, part of Reddy Development, purchased the property.  The company is an owner and developer of retail and other commercial real estate nationwide.  Cabral Holdings I, LLC, a private investor, sold the property to Desert Real Estate Holdings.

Hopley represented Cabral Holdings in the marketing and sale of the building.  Jim Liberthal of Cutler Commercial represented the buyer.

The building, which was built in 2006, contains approximately 14,854 square feet of industrial/flex space.  Located within the McDowell Mountain Ranch area, the property offers excellent access to the Loop 101. The building was in excellent condition at close of escrow and offers excellent amenities within a prestigious area of North Scottsdale.  The building features an architectural design that looks like a Class A office building.  Desert Real Estate Holdings will take occupancy of a portion of the building and lease out the remainder.

Tenant Demand is Keeping Pace with Construction of Nearly Six Million Square Feet of Space

Phoenix, AZ – Colliers International in Greater Phoenix released its mid-year 2016 Industrial Market Report for Greater Phoenix.  Report highlights are outlined below.  For more details, refer to the attached report or click here to view online.

• Industrial space users picked up the pace with leasing during the second quarter of 2016, bringing twice as many leases exceeding 50,000 sq. ft. than were signed in the first quarter. These completed, large leases will result in an uptick of approximately 1.5 million square feet in net absorption for the remainder of the year.
• The Valley-wide vacancy rate for industrial space completed the quarter at 10.8%, 100 basis points lower than a year ago. Vacancy has remained rather flat so far in 2016 as a result of an increase in inventory levels from construction deliveries.
• The combination of strong tenant demand and healthy rental rate growth is supporting new development. Nearly six million square feet of new space will be added to the Phoenix inventory during 2016.
• Rental rates continue to rise and have advanced 7.8% in the past year.
• Investment sales of industrial buildings have increased, rising by more than 35% in the second quarter. Year-to-date, building sales are up nearly 20% from the same period in 2015.  A broad base of product types is being acquired, which is a testament to the overall appeal of the Phoenix market.

According to Colliers International of Greater Phoenix, the industrial market will remain in an expansion phase at least through the end of this year.  The industrial vacancy rate will drop to 10.6 percent by year-end, which marks a slight decline from the end of 2015.  Approximately 6.7 million square feet of net absorption is forecasted for 2016, but the vacancy rate will level off at this point because of new properties being added to the inventory. The balance of supply and demand at this point is near equilibrium.  Asking rental rates will rise approximately 7.7% during this calendar year and have already increased 4% in the first half.  This follows a similar 7% increase experienced in 2015.  Sales of industrial buildings are on pace to reach their highest point in nearly a decade.  Competitive yields, low interest rates and improving property fundamentals will continue supporting investor demand.

According to Colliers International, expect the industrial market to stabilize over the second half of this year.

Industrial vacancy in Greater Phoenix ticked up 10 basis points in the second quarter, reaching 12.1 percent. The rate has dipped 20 basis points from one year ago, and has remained in a fairly tight band over the past two-plus years.

Net absorption totaled 523,000-square-feet in the second quarter, compared to approximately 1.5 million-square-feet in the first quarter. Net absorption has averaged 1.4 million-square-feet per quarter since 2010.

Projects totaling nearly 1.3 million-square-feet were delivered in the second quarter, after more than 1.7 million-square-feet came online in the first three months of the year. Deliveries will slow in the second half of the year, however, eliminating some of the supply-side pressures in the market.

Sales of industrial buildings spiked in the second quarter, following light activity in the first three months of 2015. Despite the volatility, sales velocity is off just 9 percent from the first half of 2014.

The median price in industrial sales to date is $72 per square foot, 9 percent higher than the 2014 median price. Approximately 20 percent of the buildings sold during the second quarter traded at prices above $100 per square foot.

For full report click here: Greater Phoenix Industrial Report_2Q 2015