JLL Trust Buys Metro Phoenix Distribution Center
- Dec 09, 2019
JLL Income Property Trust has acquired Chandler Distribution Center, a 211,000-square-foot Class A industrial property in metro Phoenix’s Southeast submarket, for $31 million.
Chandler Distribution Center is immediately off Route 202, a major east-west thoroughfare in Phoenix, near Chandler and neighboring Gilbert. The property comprises two newly developed Class A warehouses, which reportedly were designed to accommodate a wide range of tenant sizes—including those under 35,000 square feet, which make up the bulk of the tenant base in this submarket. The property is currently 97 percent occupied.
The acquisition is part of the REIT’s strategy to both grow its portfolio and diversify its tenant mix, property type and location, JLL Income Property Trust President & CEO Allan Swaringen said in a prepared statement. JLL Income Property Trust’s industrial holdings total 6.7 million square feet valued at nearly $750 million and represent 26 percent of the trust portfolio’s overall value, he added.
Growing and Tightening
Net industrial absorption in metro Phoenix was just more than 3 million square feet year-to-date, helping to push overall vacancy down to 6.8 percent, a cyclical low, according to a third-quarter report from Colliers International. Development remains active, with 7.9 million square feet under construction. Sales too are lively, amounting to $1.36 billion year-to-date and outrunning the 2018 transaction volume. The median price is about $104 per square foot and cap rates continue to compress, to 6.18 percent, according to Colliers International.
Just last month, the Seventy5 Business Park in southwest Phoenix traded for $22.4 million. Rialto Capital Management acquired the four-building, 222,400-square-foot Class A industrial complex.