Conor, Globe Follow Pent-Up Demand to Arizona
- Aug 11, 2015
By Barbra Murray, Contributing Editor
There’s nothing like land to add a little reality to a development endeavor, and that’s just what Conor Commercial Real Estate and Globe Corp.have gotten their hands on for AZ|60, a new speculative industrial project in Gilbert, Ariz. The joint venture partners recently acquired a 16-acre parcel from Earnhardt Properties L.P., paving the way for the 225,000-square-foot suburban Phoenix facility.
Conor and Globe have a very good reason for taking the speculative route. Simply put, Sven Tustin, vice president with Conor, told Commercial Property Executive, “There is a significant level of pent-up demand for modern industrial space within the Gilbert industrial submarket.”
It’s all in the numbers. Tustin added that while Gilbert’s existing inventory only represents 6.4 percent of the overall Metro Phoenix industrial base, in 2014, it captured 19.5 percent of the overall net absorption–a strong indicator of the desirability of the submarket. Enter AZ|60.
AZ|60 will encompass two state-of-the-art buildings within the Fiesta Tech Center, roughly 20 miles outside of downtown Phoenix. The first structure will feature 104,900 square feet and a second building will deliver 120,700 square feet. Both are likely to be well received, given the project’s premier accommodations and prime location.
“Specifically, manufacturing companies that operate near AZ|60 are in growth mode, and they seek to expand into facilities with modern functionality such as high clear heights, efficient truck maneuverability, sufficient employee parking, and amble electrical power,” said Tustin. “These companies employ highly skilled labor that live in the surrounding area, so they prefer to stay in their current locations and close to their employees.”
However, Gilbert has been seeing its share of leasing activity–approximately 261,300 square feet in the second quarter, according to a report by commercial real estate services firm JLL–and now the top-notch pickings are slim. “Due to the age and condition of the existing facilities in the area, there are very few options to expand without relocating,” Tustin added. AZ|60’s infill location and modern design can satisfy this demand by providing flexible and contemporary industrial space allowing companies to expand operations within desired locale.”
Conor and Globe have tapped JLL vice president Steve Larsen and managing director Bill Honsaker to market space at AZ|60 for sale or lease. Larsen and Honsaker represented the joint venture in the land acquisition, while George Haugen, designated broker with Haugen Commercial, stood in for the seller. The project is on track to reach completion in April 2016.