TUCSON, ARIZONA (May 9, 2023) With over 1.9 million square feet of industrial space under construction and another 1.46 million square feet permit ready in the Tucson area, we thought it would be useful to review our top 5 industrial deals occurring in the past 12 months (April, 2022 - April 2023). Tucson Industrial vacancy decreased 120 basis points (bps) quarter-over-quarter to 2.5% vacancy in Q1 2023. The industrial market captured 389,500 square feet of gross absorption this year. So, despite economic headwinds, the pace of change will not ease. Industrial real estate will probably be the most resilient sector of all this year.
#1 Amazon Silverbell Gateway Cold Storage Distribution Center
Sales Price: $22,300,000 49,500 SF on 10.75 acres Closed: 12/21/2022
The Amazon Last Mile Distribution center at 775 W Silverlake Road in Tucson sold in a net investment sale of $22.3 million ($451 PSF). The 49,500 SF distribution center with 15 loading docks, is located near I-10 and I-19, close to downtown Tucson. The “last mile” Distribution Center was constructed in 2019 on the 10.74-acre parcel and is leased to Amazon. The investment group, FEM Real Estate out of New Jersey purchased it for $18 million ($364 PSF) in July 2012 and sold it again in this transaction for $22.3 million as the seller. The Varnhagen Family Trust of San Francisco, c/o Anthony Varnhagen as trustee is the buyer with 7 years remaining on the lease and three 5-year options with Amazon. “Last mile” distribution centers play a key role in Amazon’s logistics. Andrew Bogardus and Douglas Longyear of Cushman & Wakefield in San Francisco along with Stephen Cohen of Cushman & Wakefield | Picor in Tucson handled the transaction for the seller and Michael Kuhn from the San Francisco Bay area represented the buyer.
#2 Roche Manufacturing Facility at Tangerine Commerce Park
Sales Price: $19,000,000 60,437 SF on 4.61 acres Closed: 10/25/2022
VM Building Two Corporation, an affiliate of Cottonwood Properties, sold the built-to-suit high-tech life science manufacturing facility it had developed for its tenant Roche Molecular Systems, Inc. This 60,437-square-foot facility was developed as a build-to-suit project on 4.6 acres within Tangerine Commerce Park at Tangerine Road and I-10. The new building is directly adjacent to Roche’s existing logistics and distribution facility of similar size and the new building will house instrument and service products for the company. Approximately 150 employees will staff this new facility. The building was sold in shell condition for $19 million ($314/sf) with a 10-year lease to Roche in place. The seller was represented by Mark Ruble of Marcus & Millichap. Buyer, an affiliate of Norman Properties of Poway, CA, was represented by Mike Garrido of Trident Ventures.
#3 Industrial Flex Building – Hughes Federal Credit Union
Sales Price: $13,893,950 79,072 SF on 13.24 acres Closed: 5/9/2022
Hughes Federal Credit Union purchased 79,072 square feet of industrial flex space at 3301 - 3321 E. Global Loop in Tucson from by Global Loop Tucson, LLC, Mercator Properties, LLC, and RSD MT Marathon, LLC c/o Dire Wolf Ventures of Anchorage, AK for $13,893,950 ($176 PSF). The class A brand new interior build-out has multiple bathroom cores, break areas, coffee stations, wellness rooms, and conference rooms of various sizes. Power up to 8,000 amps of electrical that is fully redundant, serviced by two separate substations. A generator existing fenced pad with conduit to the interior electrical room, a new 300-ton water-cooled chiller, and a clear height minimum of 22 feet. High-density parking (8+ to 1,000 SF) is expandable. The property is also located in an Opportunity Zone. Hughes Federal Credit Union purchased the property for administrative back-office support use by the credit union. Jesse Blum and Stephen D. Cohen with Cushman & Wakefield | PICOR represented the seller in this transaction. Brian Harpel with Velocity Retail Group, Tucson, represented the buyer.
#4 Manufacturing Site Sold to Chrome Hearts
Sales Price: $13,000,000 116,898 SF on 13.83 acres Closed: 1/13/2023
The buyer, Chrome Hearts Apparel, has assembled 52.73 acres at 8500 E Rita Road for this project, earlier having closed on 39 adjoining acres for $2.5 million. Formerly occupied by Global Solar Energy, the property has two buildings, one 10,3074 SF and the other 13,824 SF, with 40ft ceiling heights, 8-dock high roll-up doors, and one grade level roll-up door. The buyer plans to move part of its manufacturing of high-end apparel from Los Angeles to the property. Gary Emerson of GRE Partners with Robert Cohen of Newmark Knight Frank in Los Angeles represented the buyer in both transactions. Stephen Cohen with Cushman & Wakefield |Picor represented the seller Arizona Glass Properties in the land sale.
#5 Investment Sale at Eastside Research Commerce Center
Sales Price: $9,375,672 99,858 SF on 5.59 acres Closed: 4/25/2022
Rhino Realty of Nevada, LLC purchased 99,858 SF of industrial space at Eastside Research Commerce Center, 1800 S. Research Loop in Tucson, from Java Property Investments, LLC for $9,375,672. There are two tenants in the building: Grace Pacifica Machining and Anewco Products with 3-year leases. The property sold at a 5% cap rate. The late, Ron Zimmerman with Cushman & Wakefield | PICOR, represented the seller in this transaction. Grant Traub with Colliers International AZ, represented the buyer.