JLL pre-leasing underscores steady, continued demand from mid-size users

PHOENIX, Arizona – The Phoenix office of JLL has completed two lease agreements with two national credit tenants, bringing Phase I of Skyway Commons in Surprise, Arizona to 25 percent pre-leased just as the building is delivered to market. The activity also pushes plans for Phase II into active pre-construction.

The Phase I lease deals – by Pennsylvania-based Hajoca plumbing supply company and Arizona-based RideNow Powersports – were initiated months before project completion, confirming a continued pent-up demand for mid-size industrial space in Phoenix’s northwest submarket.

JLL Vice President Riley Gilbert, along with Managing Director Anthony Lydon and Associate John Lydon, represented the building owner, Silagi Development & Management, in the transactions.

“Phoenix’s far West submarkets are known for their near-insatiable demand for big-box industrial inventory, but there is an equally active mid-size market requiring modern, Class A industrial product that has a very narrow set of options to accommodate their requirements,” said Gilbert. “Silagi recognized this gap and made a bet on the market that is paying off.”

Hajoca, the nation’s largest privately held wholesale distributor of plumbing, heating and industrial supplies, moves into 10,126-square-feet at Skyway Commons Phase I this month. It will use its new space for a wholesale plumbing supply house.

RideNow Powersports will occupy 15,611-square-feet at Skyway Commons Phase I beginning in April. This will provide needed overflow space for the company, which was born from a small Honda dealership in Chandler, Arizona and has since grown into the nation’s largest powersports dealer, with more than 30 locations across the U.S.

Built on a purely speculative basis, Skyway Commons Phase I totals 110,221-square-feet of Class A industrial space at 11470 and 11560 N. Dysart Rd., at the southwest corner of Dysart and Cactus roads. Building features include a secured/fenced truck court, grade and dock-level loading, ESFR fire sprinklers, LED lighting and R-38 roof insulation.

The project falls under a Planned Unit Development (PUD) zoning, which provides for greater flexibility for a wide range of tenants with commercial business park or industrial-related uses. 

With its two pre-leases, Skyway Commons Phase I is now 25 percent leased, leaving 84,484-square-feet of space available – offering up to 43,647-square-feet of contiguous space and divisibility down to 4,689-square-feet.

Phase II of Skyway Commons will have the capacity to accommodate users up to 63,500-square-feet. LGE is the general contractor for both phases.

Selects JLL to lease major new Phoenix development

PHOENIX, Arizona – Irwin G. Pasternack AIA + Associates PC and Pasternack Properties broke ground today on TEN Distribution Center 1, a Class A industrial building representing the first 1.1 million square feet in the planned $300 million, more than 3.6 million-square-foot TEN Distribution Center industrial park, located on 83^rd Avenue near the confluence of Interstate 10 and the Loop 101 in Phoenix, Arizona.

Irwin Pasternack serves as the property owner, architect and developer. Managing Directors Anthony Lydon and Marc Hertzberg, and Vice President Riley Gilbert, from the Phoenix office of JLL, have been named the project’s exclusive leasing brokers. Graycor Construction Company serves as the general contractor.

“There really has been no better time – or location – for this project,” said Pasternack. “Phoenix is gaining national attention for its strategic location, workforce and low cost of doing business. The demand that this has generated has put Phoenix on the map with a very broad range of business sectors, and that is having an exponential impact.”

The TEN groundbreaking comes on the heels of a record-breaking 2017, which according to the JLL Q4 Phoenix Industrial Insight report, delivered the largest annual net absorption gains in Phoenix history, at 9.8-million-square-feet. It also marked the fourth consecutive year of annual net industrial space absorption totaling 6.0-million-square-feet or more, with no signs of slowing.

“Our market growth is real, and it is not stopping,” said Lydon. “That already has created a shortfall in shovel-ready industrial building opportunities of 500,000-square-feet and above and makes a project like TEN – with its location, amenities and robust City of Phoenix utilities – an increasingly rare commodity.”

TEN is also Foreign Trade Zone capable, able to reduce real property and equipment taxes by as much as 72 percent. “This is on top of any savings that the project might provide to companies relocating from high-cost markets like California,” said Hertzberg. “All told, it is an extremely attractive formula.”

Slated for completion in summer 2018, TEN Distribution Center 1 will offer ultra-modern, cross-dock industrial employment space with 40’ clear height and high volume trailer maneuverability and storage. It will also provide access to 1.75 million people within a 30-minute drive to the site, and corporate neighbors including Amazon, Cardinal Health and PetSmart.

According to Todd Ostransky, Graycor Construction Company General Manager for the Southwest Division, TEN will employ approximately 400 Graycor and construction subcontractor employees across its development and build-out. At its busiest point, this equates to 135 people per day.

At build-out, TEN Distribution Center will become the largest freeway industrial employment site in metro Phoenix, totaling 215 acres and 3.6 million square feet in six Class A industrial buildings. Future construction at the project will include five industrial buildings ranging in size from 175,000-square-feet to 1.1-million-square-feet, and fifteen retail, restaurant and service sites fronting 83^rd Avenue.

Irwin G. Pasternack AIA + Associates PC has been an active architecture and planning group since 1975, with more than 6,700 buildings in approximately 4,200 projects since inception. The TEN groundbreaking is the latest in Pasternack + Associates local activity, proceeded most recently by the 450,000-square-foot Living Spaces industrial/showroom build-to-suit at 67^th Avenue and I-10.

PHOENIX, AZ – ViaWest Group recently signed a new 37,422-square-foot lease at its Tiger Industrial Center in Phoenix. Located at 4901 & 4929 West Van Buren, the two-building complex is comprised of 103,064-square-feet and is located just one mile south of a full-diamond interchange on the I-10 Freeway. Snyder’s-Lance will relocate and expand its presence in the Valley by occupying 37,422-square-feet. This property was only 16% leased when ViaWest purchased the asset in January 2015 and now stands at approximately 60% just one year later.

This lease marks another notable occasion for ViaWest’s Select Strategies Fund focused on the acquisition of general industrial properties in Southwestern, U.S. “We’ve recently finalized many value-add enhancements at the property and it’s great to see that this has been well-received in the market,” says Brad Dales of ViaWest.

Snyder’s-Lance creates and markets snack foods internationally, including pretzels, potato chips, crackers, cookies, nuts and more. They have production facilities in 9 states and are headquartered in Charlotte, North Carolina. “We are excited to add another top-tier company to this project and look forward to growing our relationship with Snyder’s-Lance,” says Danny Swancey with ViaWest.

Riley Gilbert with Jones Lang LaSalle’s Phoenix office represented the Owner on the Snyder’s-Lance lease and is currently marketing the remaining 43,588-square-feet available in the project. Cooper Fratt with CBRE’s Phoenix office represented the Tenant.

Riley Gilbert of Jones Lange LaSalle cites “responsive management, functional lease-ready space, and great access to the I-10 freeway” as some of the factors that attracted Snyder’s-Lance. JLL will continue to market the project’s remaining vacancy.

ViaWest’s Fund includes several Arizona properties, an industrial center in El Paso, and is currently searching both locally and in neighboring states for new acquisitions.