Tag Archives: Anthony Lydon


Lincoln Property signs 552,330 SF industrial lease

Lincoln Property Company (LPC) has completed a 552,330-square-foot lease that will fully occupy a Phoenix industrial building and bring approximately 200 new jobs to the Southwest Valley.

The undisclosed distribution user will move into its new space in October and will fully occupy the project, located 7037 W. Van Buren Street in Phoenix. It will use the building to service a major requirement from a distribution-centric Fortune 50 company. It will also hire approximately 200 employees.

JLL Managing Directors Marc Hertzberg and Anthony Lydon represented LPC. Tom Louer of Lee & Associates represented the tenant.

“This lease is a great example of a positive Arizona industrial market,” said Hertzberg. “This user chose Phoenix after a multi-market search that included Northern and Southern California. It then chose this building, in particular, from among a very competitive local inventory that includes five or six newly constructed, nearby alternatives.”

According to LPC, the new distribution user selected the 7037 W. Van Buren Street property because of its close proximity to Interstate 10 and the building’s existing infrastructure, offering a critical speed to market.

“The 7037 property had virtually all of the needed build-out specifications already in place, including lighting and cooling requirements, existing dock equipment and approximately 10,000 square-feet of office space. Competing buildings didn’t have those improvements or a Certificate of Occupancy for immediate move-in,” said Lincoln Property Company Vice President Amr Ceran. “We were able to work quickly with all parties to take advantage of that benefit.”

Totaling 552,330 square feet, the project offers 31.5- to 35.5-foot clear heights, 57-foot column spacing, 100 truck bays, cross-dock and front-load configurations, energy-efficient lighting and modern electrical, cooling and ESFR systems. It also sits within a Foreign Trade Zone, which represents a significant potential for real and personal property (equipment) tax reductions and duty deferral or elimination.

“Phoenix occupies one of the most strategic and cost effective supply chain locations in the West,” said Lydon. “That is a powerful combination for logistics operators.”

TEN Aerial

JLL sells $300M mixed-use business park in Phoenix

The Phoenix office of JLL has completed a land deal that assembles 215 acres at I-10 and 83rd Avenue in Phoenix for TEN – a mega $300 million mixed-use business park. When complete, the project will become the largest freeway industrial employment site in Phoenix.

Irwin Pasternack serves as the property owner, architect and developer. JLL Managing Directors Anthony Lydon and Marc Hertzberg represented Pasternack in the land purchase and serve as the project’s exclusive leasing brokers.

The team expects to have at least one major, million-plus-square-foot industrial building under construction within the next 12 months.

“This is absolutely the best location for an Arizona industrial project,” said Pasternack. “It has premier freeway frontage at the intersections of Interstate 10 and the Loop 101, is on route from the docks in California to the rest of the country, enjoys tremendous corporate neighbors and a massive footprint large enough to handle any corporate need in the marketplace. We will compliment that development with retail services such as gas, food and neighborhood retail, to create a full-service offering and a great place to work for companies and their employees.”

“The promotion of TEN is focused on high end, pre-leased build-to-suits on behalf of national and international companies,” added Lydon. “Corporate design/build demand continues to drive the Phoenix industrial market. In fact, we’re currently tracking eight to 10 million square feet of employment development that has sustained interest in Arizona for their location solutions.”

Located near the confluence of I-10 and the Loop 101, TEN offers significant building opportunities. The master plan for the shovel-ready freeway site includes retail/commercial services along 83rd Avenue and modern build-to-suit industrial solutions scalable to 1.5 million square feet. TEN enjoys direct access to the 1.5 million-person West Valley workforce and corporate neighbors including Amazon, Cardinal Health and PetSmart. It also offers Foreign Trade Zone capability, reducing both real and equipment taxes by 72 percent.

“Phoenix’s long-term economic health depends in part on its ability to attract, accommodate and retain industry as part of a balanced and diversified economy,” said Phoenix District 7 Councilman Michael Nowakowski. “This assemblage of land, with its high visibility and accessibility, is perfect for attracting new businesses that will be able to operate efficiently and profitably.”

Active in the market since the mid 1970s, one of Pasternack’s most recent project is the 450,000-square-foot Living Spaces industrial build-to-suit at 67th Avenue and I-10.

“TEN will deliver a similar inventory – buildings of 500,000 square feet and up with modern, state-of-the-art amenities,” said Hertzberg. “We are early in Phoenix’s industrial rebound, but it is happening. The time is right to bring this site to market.”

Youngs Market, WEB

Young’s Market Company leases 250KSF in Phoenix

Cassidy Turley announced Tuesday that Young’s Market Company of Arizona leased 248,900 square feet at 402 S. 54th Pl. in Phoenix. Young’s Market Company is one of the nation’s largest distributors of wines and spirits with operations in California, Hawaii, Arizona, Oregon, Washington, Alaska, Idaho, Utah, Montana and Wyoming.

Cassidy Turley’s Executive Managing Directors Andy Markham, SIOR, Mike Haenel and Vice President Will Strong represented Young’s Market in the lease negotiations. The team represented Young’s in previous site selections, including a distribution space at 200 S. 49thAvenue that is currently available for lease or sale with the Cassidy Turley team.

The landlord, Barley Equities V, LLC (First Beverage Group) was represented by Anthony Lydon, SIOR, CSCMP, and Marc Hertzberg, SIOR, with JLL. The industrial refrigeration and cold storage building was the former home of Crescent Crown Distributing.

Dick's Sporting Goods distribution warehouse, Goodyear

Industrial Evolution: West Valley poised for land grab

Dick’s Sporting Goods built a 720KSF distribution center in Goodyear to service its West Coast stores.

A California-based investor erected a 400KSF spec shell in Surprise’s Southwest Railplex business park.

Corporate giants, Macy’s, Amazon, Sub-Zero, Marshall’s/TJ Maxx, Southwest Products and WinCo have landed or expanded their vast West Valley industrial operations within the last two years.

Even more companies are eyeing potential stakes in the burgeoning industrial parks springing up in once sleepy bedroom communities west of Phoenix.

With the recession in their rear-view mirrors, local, national and international companies are revving up manufacturing and distribution operations, and the West Valley is poised to be a big beneficiary of their expansion plans.

Justin LeMaster, Cushman & Wakefield

Justin LeMaster, Cushman & Wakefield

Available and affordable land, a deep labor pool, business-friendly state and local governments and top-notch transportation corridors contribute to the West Valley’s desirability, said Justin LeMaster, Cushman & Wakefield’s director for industrial properties.

Farsighted developers are already master-planning vast spreads of land, setting up infrastructure and even building large-scale spec structures that can accommodate another industrial giant or get sliced and diced to accommodate several smaller operations.

The developers — along with city and state economic development specialists — want their properties primed to snag the business when the lookers become movers, LeMaster said.

“Smart, creative developers will make the West Valley a successful high-growth market for years to come,” he said.

The numbers confirm the trend.

An impressive 4.5 MSF — nearly 94 percent of the metro area industrial construction started or completed in 2013 — is in the West Valley, according to Jones Lang LaSalle’s Q4 Industrial Report.

Q4 absorption was 1.96 MSF, and only 15.3 MSF of the West Valley’s 90.7 MSF total industrial inventory was still available at year’s end.

Nevertheless, 4.5 MSF is a significant amount of new inventory for a post-recession market, and, in fact, it boosted Valleywide industrial vacancy rates above 12 percent.

Anthony Lydon, Jones Lang LaSalle

Anthony Lydon, Jones Lang LaSalle

Industry experts aren’t worried.

“The new, grown-up, industrial tenants coming to market right now are looking for 300KSF, 400KSF and above,” said Anthony Lydon, Jones Lang LaSalle managing director for Supply Chain & Logistics Solutions.

Less than half of the West Valley’s available space meets that criteria, and a few big employers could snatch that up in a flash, he said.

Like LeMaster, Lydon expects that to happen sooner rather than later.

“Over the next 24 to 36 months, the Valley, and the West Valley in particular, will see significant new job creation,” he said.

So what makes the West Valley suddenly so attractive to the industrial users?

“Economics and location,” said Pat Feeney, CBRE senior vice president for industrial services.

Cost is key
Of the metro area’s three major industrial hubs ­— the airport area, the Tempe/Chandler corridor and the West Valley — the first two are nearly out of developable land, Feeney said. And scarcity makes that land pricey, especially for a large user.

Pat Feeney, CBRE

Pat Feeney, CBRE

A skilled and diverse labor force that moved west when the home builders did is another major factor, he said.

“Nearly 70,000 people live in Goodyear, but only 14,000 or 15,000 work in Goodyear,” Feeney said.

When big employers like Sub-Zero, Amazon and Macy’s held job fairs for their new West Valley digs, they typically attracted eight to 10 qualified applicants for every position, he said.

“They all shared that they were so happy they could pick the cream of the crop,” Feeney said. “It’s a really big draw.”

David Krumwiede, Lincoln Property Company

David Krumwiede, Lincoln Property Company

Staffing a large warehouse is a major economic concern, especially for companies with labor-intensive, e-commerce picking systems, said David Krumwiede, executive vice president for Lincoln Property Company, which owns 6 MSF in its four-state Desert West Region, 2.4 MSF of that in the West Valley, including Goodyear AirPark and 10 Lincoln.

Arizona’s main competition for the big industrial users looking to establish or expand operations in the West is California’s Inland Empire, Krumwiede said.

While the Inland Empire’s construction costs are comparable to Arizona’s, labor costs in Arizona, a right-to-work state, are much lower, he said.

“We are extremely competitive with California’s Inland Empire if a user has more people than trucks,” Krumwiede said.

And big energy consumers, such as companies employing sophisticated e-commerce logistics technology, can save as much as 30 percent to 40 percent in operating costs by locating in Arizona instead of California, Lydon said.

But possibly the biggest economic incentive for many industrial users is Arizona’s much more favorable tax basis, Krumwiede said.

All of the West Valley’s large planned business hubs have designated areas that are Foreign Trade Zone capable, and that’s a big selling point for companies that do significant international business in parts or products, Krumwiede said.

“If a company qualifies, it can see a 72 percent reduction in property taxes,” Feeney said. “It’s a tremendous benefit.”

And a benefit none of the nearby states can offer, he said.

Such issues make Arizona, especially the West Valley, where land is available and affordable, a clear economic winner over California.

Location, location, location
Second only to the West Valley’s attractive economics, is its advantageous location, less than half-a-day’s drive from the southern California ports — a major consideration for retailers and e-commerce leaders like Amazon, as well as manufacturers like Sub-Zero, according to the experts.

Rob Martensen, Colliers International

Rob Martensen, Colliers International

“If you can get out of traffic and get closer to the ports in Los Angeles and Long Beach, you can make that in six hours,” said Rob Martensen, Colliers International vice president.

That means truck drivers can log a round trip and still stay within federal guidelines regarding length of time on the road, a feat not so easy to accomplish from the East Valley.

And for companies distributing products regionally — Macy’s or Dick’s Sporting Goods, for example — the completion of the Loop 303 will forge the final freeway link that can speed trucks to and around cities and states north and west of Phoenix.

“It will open the gateway,” LeMaster said. “Companies want to be in Phoenix, and the West Valley will be the industrial hub of Phoenix with the (Loop 303/I-10) interchange.”

Overall, the combo of favorable attributes will ensure the West Valley lands on the short list for large and small industrial users for the next decade or so, Krumwiede said.

“The companies that are already out there — Amazon, Target, Costco, PetSmart, Staples, Macy’s — are all household names. It’s a great start. We’ll see more of those,” he said.

“My vision is that a lot of that vacant land will be put into production in the next five to 10 years.”


Jones Lang LaSalle Completes Land Sale For 600K SF Spec Industrial Building

The Phoenix office of Jones Lang LaSalle has completed a 38-acre land sale in Phoenix’s Southwest Valley that, by early 2013, will be home to approximately 600,000 SF of speculative, state-of-the-art industrial space.

Managing Directors Anthony J. Lydon, SIOR, and Marc Hertzberg, SIOR, of Jones Lang LaSalle represented the property buyer, Seefried Industrial Properties, Inc. The seller’s agent is Rich Sica of Daum Commercial.

The site, located at the NEC of 63rd Ave. and Sherman Way in Phoenix, was acquired by a venture between USAA Real Estate Company and Seefried Industrial Properties. The venture will proceed with the development of Estrella Logistics Center, a speculative $30M, 592,500 SF, cross-dock distribution building.

“Seefried and USAA are specialists in developing, leasing and managing premier industrial logistics projects,” Lydon said. “They are experts at knowing what to build and where to build it, and they have chosen an exceptional time to deliver speculative industrial product in Phoenix.”

According to Jones Lang LaSalle research, there is approximately 6 MSF of current user demand in Phoenix for requirements of 100,000 SF or more; however, supply has not kept up with demand. As such, the market experienced an anaemic first quarter, with just 92,598 SF of net industrial absorption as compared to a total 6.9 MSF of net industrial absorption in 2011.

“The only local industrial construction that we’ve seen completed this year falls in the single-tenant, build-to-suit category,” Hertzberg said. “This does little to satisfy this market’s broader demand for large blocks of space. This will be the key driver for new Phoenix speculative industrial development in 2012.”

Jones Lang LaSalle reports that demand for larger industrial spaces in the Southwest is the strongest among national retailers, food and beverage distributors, solar and e-commerce businesses. This is due in large part to Phoenix’s proximity to California, its 30 to 40% lower business costs, and the availability of quality land that is also near the market’s many accessible transportation lines.

The future Estrella Logistics Center site will be fully improved with all of the modern logistics amenities expected by the supply chain industry. The project sits just south of Interstate 10, between the 59th and 67th avenues full interchanges.

Construction on Estrella Logistics Center is slated to begin in October and will be completed by May 2013. For occupancy, Seefried and USAA plan to pursue corporate employers seeking a scalable space solution.