Liberty Property Trust has acquired two buildings in Tempe as part of a national 177-asset industrial deal that adds about 23 million square feet to its industrial portfolio.
Malvern, Pa.–based Liberty bought the operating partnership of Cabot Industrial Value Fund III for $1.5 billion. Approximately 58% of the total portfolio is located in existing Liberty industrial markets, including Chicago, south Florida, Houston, New Jersey, Maryland, Arizona and central Pennsylvania. Ten million square feet of the portfolio are located in 10 markets where Liberty did not previously have a presence, including Atlanta, Dallas-Fort Worth and Southern California.
Located at 1858 East Encanto Drive and 475 West Vaughn St., the two Tempe properties add 149,271 square feet of space to the company’s local portfolio. Liberty owns and manages approximately 3 million square feet of industrial space in Scottsdale, Phoenix, Tempe, Goodyear and Tolleson. Those holdings include Liberty Logistics Center, Liberty Cotton Center, Liberty 303 Business Park, Liberty Tolleson Center, Liberty Sky Harbor Center. Also in the REIT’s Arizona portfolio is the office building at 8501 East Raintree Drive, which has earned LEED Gold and Energy Star certification.
According to John DiVall, Liberty’s senior vice president and city manager, Tempe is a strategic location for tenants and one of the strongest areas for growth in metropolitan Phoenix. “This acquisition is very exciting to us because it allows us to expand out footprint in Tempe and further our relationship with the City,” he said in a statement.
In 2012, Tempe tapped Liberty as the master developer for a 100-acre site located at Priest Road and Rio Salado Parkway. The planned 1 million-square-foot project, Liberty Center at Rio Salado, will integrate office, flex, industrial, and retail components and will be designed to meet LEED certification standards.
Investor interest in the industrial market remains strong Valley-wide, with total vacancy levels, excluding Flex properties, at 12 percent, according to Jones Lang LaSalle Inc.
The development pipeline remains active with 5.2 million square feet currently under construction. The Southwest Region is second only Southern California for both speculative and build-to-suit development. One major project was delivered in the third quarter of 2013, a 1.2 million-square-foot distribution building at 5501 SE Lower Buckeye Ave. which is fully occupied by TJX.
Charts courtesy of Jones Lang LaSalle Inc.