Tag Archives: JLL

ChandlerCorpCenter, WEB

Palisades Private Capital Fund acquires Chandler Corporate Center

Palisades Private Capital Fund 1, a $50-million Fund created by Palisades Mexico Partners (PMP), has acquired Chandler Corporate Center, a two-story, 67,561-square-foot Class A office asset in Chandler, Ariz., for $13.9 million.

PMP is a joint venture of Joaquin de Monet, founder and managing principal of Palisades Capital Realty Advisors, LLC, an investment management and advisory firm, and Sergio Argüelles, president/CEO of Monterrey, Mexico-based FINSA, one of the foremost industrial real estate development firms in the Americas.

“Chandler Corporate Center is a well located, attractive office building with sustainable features that provide the tenants with economical operations and a comfortable, healthy work environment,” said Argüelles, a Mexican real estate mogul who transformed his family-owned company into a highly successful real estate development firm in Mexico. “The asset offers our investors a stabilized, secure and growing cash flow, with the opportunity for significant rent increases as the market continues to improve,” he added.

“Growth in the region’s high-tech sector has boosted job growth, beginning in the last quarter of 2013,” explained de Monet, a successful and seasoned executive with expertise in large global real estate investments and property management. “This upturn in Chandler’s economy is increasing demand for office space and this acquisition is in the right place, at the right time,” he noted, “offering an opportunity to invest in the right cycle of the market.”

Situated on 7.24 acres at 585 North Juniper Drive northwest of Chandler Boulevard and McClintock Drive, this LEED-certified building, which was built in 2008, is PMP’s first investment in the Arizona market.  The property provides tenants, including MediServe Information Systems, STA Travel and Garmin International, Inc., ample open and canopied, surface parking spaces with an excellent 6.63:1000 parking ratio.

Jones Lang LaSalle handled the transaction for both the seller, Held Properties, Inc., and PMP.

Palisades Private Capital Fund I, which has raised $50 million in private capital and is on target to increase the Fund to $100 by yearend, is focusing on value-add, Class A and B office assets in growing western suburban markets. The Fund initially will acquire institutional-quality office assets in Southern California, Arizona and Texas. Besides the Chandler asset, PMP recently acquired a property in Southern California: 2929 Imperial, a two-story, 121,143-square-foot, office building in Brea, for $20.8 million.

PMP’s capital campaign is connecting with high net-worth individuals and family offices specifically in Mexico and Latin America. PMP will accumulate a diversified pool of suburban office properties priced below replacement cost, with solid in-place cash flow and average 75% occupancy. De Monet and his team at Palisades Capital will source investments and manage the Fund, improving the assets, creating value and capturing rent growth over the targeted hold period of three to five years.

Durango, WEB

JLL completes one of the largest industrial leases of the year in SW Phoenix

On behalf of Clarion Partners, the Phoenix office of JLL has completed a 93,489-square-foot lease with Benson Industries, LLC at Durango Commerce Center in Phoenix. The deal represents one of the largest industrial lease transactions in Phoenix’s Southwest Valley submarket this year. It also brings the 670,000-square-foot, two-building Durango Corporate Center to 91 percent occupied and locates Benson Industries into its first-ever Arizona address.

Portland-based Benson Industries manufactures curtain wall systems for skyscrapers and other commercial structures. Just one of their latest projects includes the exterior shell and glass for One World Trade Center in New York City.

“Benson secured this location primarily to serve its major construction projects in California,” said JLL Executive Vice President Pat Harlan, who represented building owner Clarion Partners along with JLL Executive Vice President Steve Sayre and JLL Associate Kyle Westfall. “By locating in Arizona, tenants can maintain direct access to California but sidestep that market’s sometimes costly barriers to entry. At the same time, they gain the benefits of Arizona’s exceptional business environment, competitive tax rates and growing economy.”

Benson will use its new Phoenix location for manufacturing, assembly and distribution. Isy Sonabend and Richard Foss of NAI Horizon represented the tenant, Benson Industries.

Situated at 2225 S. 75th Ave. in Phoenix, Durango Commerce Center is a best-in-class, institutional-grade distribution property that offers direct access to I-10, 30-plus-foot clear height, ample parking and a modern ESFR system. The project is currently 91 percent leased to tenants such as The Gap, Consumer Connect and Regal Distribution. An additional 62,305 square feet of industrial distribution space remains available for lease.

ChandlerCorpCenter, WEB

Chandler Corporate Center sells for $13.9M

Capital markets experts in the Phoenix office of JLL have completed the $13.914 million sale of Chandler Corporate Center I, a 67,561-square-foot Class A office property in Chandler, Arizona. The sale price breaks the $200-per-square-foot mark for suburban office space—a significant indicator according to JLL.

JLL Senior Managing Director Dennis Desmond represented the property seller, Chandler HFP, LLC, an affiliated entity of Held Properties, a California real estate development firm. Palisades Capital Realty Advisors is the property buyer. JLL Managing Director Dave Seeger serves as the project’s exclusive leasing broker and partnered with Desmond to market the property for sale.

“This building came out of the ground in 2008 and has outperformed the Phoenix and Chandler markets ever since,” said Desmond. “This includes through the toughest office market recession we’ve ever experienced. That is evidence of the strength of the Chandler market and was a tremendous draw for investors looking for stable acquisition properties located in high-growth markets.”

According to JLL research, in the four years from 2009 to 2012, Chandler was responsible for 66 percent of Greater Phoenix’s total office space absorption. At year-end 2013, Chandler Corporate Center I was only 8.5 percent vacant, compared to an overall Chandler submarket office vacancy rate of 13.9 percent and an overall Phoenix office market vacancy rate of 23.9 percent.

“When it comes to the velocity of our recovery, Chandler is definitely one of our market’s bright stars,” said Seeger.

Chandler Corporate Center I is located at 585 N. Juniper Drive in Chandler, northwest of Chandler Boulevard and McClintock Drive, and with direct access to the Loop 101 and Loop 202 freeways, and the burgeoning Price Road technology corridor. The two-story building totals 67,561 square feet with a 6.63/1,000 parking ratio, modern office construction and benefiting from the area’s highly educated labor pool.

JLL will retain the leasing assignment at the property and assume the property management responsibility.

Mark Stevens hired as JLL national director

Stevens_MarkAs part of its ongoing commitment to strategically grow the industrial property management services it provides for clients, JLL has hired Mark Stevens as a National Director of Industrial Property Management in the West Region. Stevens will be based in the firm’s Phoenix office, responsible for the development of industrial property management business opportunities across the Western U.S. He will also partner with the JLL East Region to pursue and grow joint national opportunities.

“The West holds tremendous opportunity for JLL to expand our industrial property management services and best serve our clients, and we’re very pleased to welcome Mark into that process,” said Dan Pufunt, JLL President of Property Management. “Mark has an outstanding reputation and a broad knowledge base that spans leasing, investment and management. This gives us unprecedented capacity in the Western states and a great partner to help advance our national business development strategy.”

“We are equally pleased to have Mark headquartered out of our Phoenix office,” said Dennis Desmond, Senior Managing Director and head of the JLL office in Phoenix. “Our local team has grown exponentially in the last five years. Mark’s presence only adds to that depth of expertise and to the collaboration we’re able to foster with other JLL offices and clients across the West.”

Stevens most recently served as Director – City Leader in the Western U.S. Industrial Practice at the Phoenix office of a competing local brokerage firm. Prior to that, he held executive-level positions in the acquisitions, asset management and brokerage/leasing functions at Cabot Properties, RREEF and Cabot Industrial Trust, among others.

Stevens is an alumnus of Loyola Marymount University in California and holds an Arizona Real Estate License. He is an active member of the National Association of Industrial and Office Properties (NAIOP) and the Urban Land Institute (ULI).

ecommerce

E-commerce opens retail channels

It’s estimated that U.S. e-commerce sales will be $278B in 2014. By 2016, that spending will be $327B — a 62 percent increase in five years, according to Forrester, Inc. estimates. Yes, that’s a drop in the pool of the U.S. retail market (about 3 percent). However, it’s not one that brick-and-mortar retail brokers are ignoring. Local brokers weighed in on how Phoenix can and should adapt to the changing channels of retail real estate.

“People have a tendency to separate e-commerce from brick-and-mortar stores. The retailer of the future has to learn to adapt to do both,” says Velocity Retail Group Executive Vice President Darren Pitts. “The strong retailers of the future will continue to evolve with a multi-channel, often referred to as an omni-channel approach, that takes advantage of various sales mediums including mobile devices, the internet, catalog, as well as brick-and-mortar.”

De Rito Partners’ Brokerage President Stan Sanchez says e-commerce will affect the way business is conducted but not replace store-front appeal to some customer groups.

“Service-oriented businesses and daily needs stores will always have a role in commercial real estate, because those tenants can’t be replaced by online retailers,” he says.

“While some may think that e-commerce threatens brick-and-mortar venues, the truth is it simply adds a new dynamic to the location, the size, and the type of real estate these businesses are looking for.”

E-commerce is shifting many retailers into smaller stores and creating more flexible shopping centers, says JLL Vice President of Retail Tyson Switzenberg.

“While e-commerce and technological innovations threaten certain retail models like bookstores or video stores, it’s not the whole story and does not represent all retailers,”adds Switzenberg.

What’s an important trend in retail that people should be watching?

Stan-SanchezStan Sanchez
President, De Rito Partners
One of the most important trends to emerge in retail, along with e-commerce, is the growth of buying power from groups such as millennials and Hispanic consumers. These two groups are growing at a rapid rate and control an enormous (over $1 trillion in consumer spending) amount of purchasing power. The key for retailers is learning the purchasing habits of these groups and making adjustments to their purchasing characteristics. Many see millennials as a segment of society that is in-tune with technology. For retailers, the goal is to take advantage of integrating that technology into physical stores and to track their customer’s buying habits to help increase the bottom line.


DarrenPittsDarren Pitts
Executive Vice President, Velocity Retail Group
Personalized offers or information provided to a shopper when they enter a store and sent directly to their mobile device. These offers are specific to the customer’s purchasing pattern and only for their use while they are in the store. Another trend is retailers who use their stores as fulfillment centers. As an example, if a customer wants a particular type of shirt but it is not in the store they are physically in, but in another, they can have it shipped directly to their home. The retailer controls their inventory better, and the customer gets what they want.


Switzenberg_TysonTyson Switzenberg
Vice President, JLL
Experiential retail. Retailers need to give shoppers a good reason to make an in-person visit to their stores—to go beyond a simple retail transaction that shoppers can do virtually anywhere. Customers are looking for an experience. Some retailers practicing this include: Apple Store: the “Genius Bar” offers hands-on troubleshooting, where customers can interact with friendly, trained experts in a unique, designated space; Flix Brewhouse: As America’s Cinema Brewery, this retailer combines the latest Hollywood productions, custom crafted beer and great food – all served “in theater” and a la carte basis so that the experience can be customized.

JLL-Clarion-Kuehne-CGrande

JLL leases 200KSF in Casa Grande

The Phoenix office of JLL has completed a 201,666-square-foot, five-year warehouse/distribution lease with global logistics company Kuehne + Nagel, Inc. in Casa Grande. The lease establishes Kuehne & Nagel’s presence in the Central Arizona market—a growing site selection consideration for industrial distribution and logistics users in the Western United States.

“For the right users, Pinal County definitely offers an alternative to the high costs of Southern California industrial space,” said JLL Executive Vice President Pat Harlan, who represented building owner Clarion Partners along with JLL Executive Vice President Steve Sayre and JLL Associate Kyle Westfall.

According to JLL’s Q1 Industrial Report, warehouse/distribution space in Pinal County has done well in the past 24 months, dropping from 17 percent vacancy in 2012 to 13.1 percent vacancy today. Although absorption has remained flat, market recovery is pushing developers to consider new industrial and warehouse projects in the area.

“Creating an inland port environment in and around Casa Grande—half way between Phoenix and Tucson—would allow companies to move their products from California’s ports directly to a more cost effective, inland location, then on to the rest of the U.S.,” said Harlan.

Kuehne + Nagel’s new space is located at 2592 E. Hanna Rd., approximately five miles southeast of central Casa Grande and directly adjacent to Interstate 10. With approximately 63,000 employees at more than 1,000 locations in over 100 countries, the Kuehne + Nagel Group is one of the world’s leading logistics companies.

5th Street 5x7

JLL closes $9M industrial sale for Clarion

The Phoenix office of JLL has completed the $9 million sale of 5th Street Industrial, a 110,000-square-foot industrial building at 3405-3445 S. 5th Street in Phoenix. The deal bolsters the rapid recovery of Phoenix industrial space in the 50,000 – 150,000-square-foot range, as highlighted in the first quarter Phoenix Industrial Report released last week by JLL’s local research team.

JLL Managing Directors Mark Detmer and Bo Mills were the industrial capital markets brokers involved with the sale between the property seller, Clarion Partners, and the property buyer, DCT Industrial Trust. JLL Executive Vice Presidents Pat Harlan and Steve Sayre, and Associate Kyle Westfall, are the project’s local market leasing brokers.

“This size and type of Phoenix industrial space is definitely outperforming the larger blocks of space in the local industrial sector,” said Detmer. “That is not to say that other blocks of space haven’t entered the recovery cycle. They just haven’t done so at this same rapid clip.”

“The 5th Street Industrial asset is irreplaceable for a number of reasons,” said Sayre. “It has an excellent location west of the I-10 in the heart of the Airport submarket. It is fully leased to a long-term credit tenant, and it was priced at a point that allows the new owner, DCT Industrial Trust, to take advantage of some strong investment upside potential. This is a compelling combination.”

5th Street Aerial 5x7According to JLL’s most recent research report, Phoenix’s Q1 industrial absorption—totaling 829,777 square feet—was driven primarily by users in the 50,000 – 150,000-square-foot range. Leasing activity among this user type has increased in lockstep with the recovering economy. Built in 1986, 5th Street Industrial includes 26-foot clear height, grade- and dock-level loading, and A-2 zoning on 6.55 acres.

“DCT is pleased to add 5th Street to our Phoenix portfolio, a 100 percent occupied building with a credit tenant,” said Mark Bowen, Regional Vice President at DCT Industrial.  “This acquisition demonstrates DCT’s focus on continually upgrading our portfolio in our focus markets, with the acquisition of Class-A buildings in highly desirable submarkets.”

For more news, videos and research resources on JLL, please visit the firm’s U.S. media center Web page: http://bit.ly/18P2tkv.

The Esplanade

JLL earns exclusive leasing assignment for Esplanade office towers

After an extensive vetting process, the Phoenix office of JLL has been selected as the exclusive leasing agent for the four Class A office towers at The Esplanade, a 1-million-square-foot landmark mixed-use project located at 24th Street and Camelback Road, in the heart of Phoenix’s prestigious Camelback Corridor.

JLL Managing Director John Bonnell and JLL Vice Presidents Brett Abramson and Greg McMillan will direct all office leasing efforts for The Esplanade’s 10- and 11-story, Class A office towers. The buildings were constructed between 1989 and 2002, and represent a total 906,459 square feet of space at 2425, 2525, 2575 and 2555 E. Camelback Rd. Each tower features high-end finishes, panoramic views of Camelback Mountain and Piestewa Peak, private balconies, 24-hour security, on-site conference and fitness facilities, concierge and abundant covered parking.

JLL is also working with property owner by MetLife, Inc. as it implements extensive, project-wide renovations that are delivering new building lobbies, new corridors, an upgraded amenity package and new speculative office suites.

“The Esplanade represents some of the Valley’s nicest office space in an equally premier location. It is one of those iconic projects that checks virtually every box on the tenant and employee wish list,” said Bonnell. “It also has an owner that recognizes the value of these advantages, and will make the investment necessary to ensure The Esplanade remains a market leader for the long term.”

In addition to its office towers, The Esplanade includes a first-floor retail component, fine and casual dining, a 14-screen AMC Theatre, a 291-room Ritz Carlton Hotel, and a pedestrian-friendly design that links the project to neighboring Biltmore Fashion Park, one of the metro area’s most upscale shopping and dining environments.

The Esplanade is within one mile of Piestewa Freeway/State Route 51 and minutes from the Valley’s Loop freeway system, Interstate 10, Downtown Phoenix and Sky Harbor International Airport. These factors combined to rank Camelback Road as #34 on JLL’s list of Most Expensive U.S. Streets for Office Space in 2013—an overview of the nation’s most premier, in-demand submarkets for office space.

Tempe, JLL, WEB

Demand for Density Meets Demolition Strategy

Greenlaw Partners and The Broe Group have selected the Phoenix office of JLL to market a 90KSF office project in Tempe, Ariz., where the demand for high density space spurred demolition of a portion of the complex in exchange for a higher parking ratio. Greenlaw Partners and The Broe Group purchased the project for $3.5M.

Tempe 10/60 Corporate Center (formerly known as Corporate Fountains) is located at 4415 – 4625 S. Wendler Dr. in Tempe, alongside Interstate 10 and just south of the I-10/SR-60 (Superstition Freeway). The project originally totalled 110,000 square feet in two 45KSF, two-story buildings and one 20,000-square-foot, single-story building. Upon review of the property, Greenlaw and The Broe Group recognized the opportunity to add value to its investment through a number of key physical changes. In an effort to increase density, one of the project’s buildings—located at the center of the property—was demolished to create a two-building, 90KSF campus.

The demolition upgraded the project’s parking ratio from 5:1,000 to 7:1,000. The new owners plan to complete additional improvements in the coming months, including the demolition-rebuild of existing building interiors.

“This creates a greater corporate advantage and improved occupancy costs for our target users,” said Scott San Filippo, partner at Greenlaw Partners. “JLL is a great choice to market this asset in that they are a strategic partner in effectively positioning creative opportunities such as Tempe 10/60 Corporate Center. Phoenix has a lot of value-add opportunity and it will be a market where we look to remain active.”

“Going to this length to create a high density environment underscores Phoenix’s demand for this type of space,” said JLL Managing Director Dave Seeger, who is marketing Tempe 10/60 Corporate Center with JLL colleague and Managing Director Karsten Peterson. “A parking ratio of 4:1,000 or 5:1,000 is good, and 6:1,000 is great, but a ratio of 7:1,000 is outstanding.”

According to JLL’s Q1 2014 Phoenix Office Report, tenants across the Valley are beginning to see their already limited space options dwindle in hot submarkets like Tempe. This is driving up rental rates and creating growing upside potential for owners, including those with high-density space that is attractive to users like call centers, high tech companies and financial institutions.

“We’re excited about the opportunity to partner with Greenlaw on this acquisition,” said Jim Crawford of The Broe Group. “We’re bullish on Phoenix as well, but recognize that success is based on teaming with owners who are experts at adding value and who understand the dynamics of the tenants in the market.”

“Corporate America as a whole is moving toward the open office configuration—highly efficient, very flexible, higher density footprints,” said Peterson. “Adaptive reuse plays like Tempe 10/60 Corporate Center are a prime example of how owners can repurpose inefficient, zombie space to economically reposition a project.”

Originally built in 1985, Tempe 10/60 Corporate Center features 10-foot ceilings, floor-to-ceiling windows, generous landscaping and immediate freeway visibility and access to Interstate 10 via Baseline Road. It is minutes from the I-10/US-60 interchange, Arizona Mills Mall, Sky Harbor International Airport and Arizona Grand Resort.

Camelback Arboleda

JLL Completes $24.9M Sale of Camelback Arboleda

Capital Markets experts in the Phoenix office of JLL have completed the $24.9M sale of Camelback Arboleda, a 178,792 SF, multi-tenant office building located at 16th Street and Camelback Road, in the heart of Phoenix’s prestigious Camelback Corridor.

JLL Senior Managing Director Dennis Desmond and JLL Senior Vice President Brian Ackerman represented the property seller, Camelback 1661, LLC. The property buyer is Merced Restart Phoenix Investors I, LLC.
This is the second time in two years that JLL has brokered a Camelback Arboleda sale—an indication, JLL says, of the market’s ability to deliver upside potential for strategic buyers.

“Investor interest in the Phoenix office market has increased dramatically since 2011-2012,” said Desmond. “Our client recognized the opportunity in this trend, and significantly improved the appearance of Camelback Arboleda and the quality of its rent roll to take advantage of improved investor appetite.”

“The property also has attracted an increasing amount of medical tenants seeking a quality location in a tightening market, creating another stabilizing factor in the positioning of this asset,” added Ackerman.
Camelback Arboleda’s leasing team, Chris Latvaaho and Michael Crystal of Cushman & Wakefield, assisted with the transaction and will retain the leasing assignment for the new owner.

According to JLL’s Q1 2014 Phoenix Office Report, rental rates in the Camelback Corridor submarket have grown significantly in the past two years, from an average $23.77 per square foot in early 2012 to an average $25.12 per square foot today. “The new Camelback Arboleda building owners believe these rental rates will continue to grow, as do we,” said Desmond.

JLL Report

As Phoenix Suburban Office Markets Recover, Skyline Poised to Follow

“Game on” seems to be the sentiment of Phoenix office tenants as they continue to bounce back from the recession, albeit with smaller work spaces that must achieve greater efficiencies with a reduced footprint. Suburban office markets—primarily in Tempe, Chandler and the Camelback Corridor—that are close to employees and offer higher-density parking are leading this trend, according to JLL’s Spring 2014 U.S. Skyline Review. (see link below)

“The Phoenix Skyline experienced the full force of the recession, and most of its tenant base shed jobs and reduced their real estate footprints in response,” said Dennis Desmond, Senior Managing Director in the Phoenix office of JLL. “But Phoenix jobs are returning, and with them a steady growth in occupancy that is tightening and pushing rental rates Valley-wide. Over the next several years, we expect this to have the same impact on the Downtown and Midtown Skyline submarkets.”

JLL’s proprietary Skyline report identifies and tracks micro-segments of 43 city centers across the nation. The Skyline features Trophy and Class A buildings where tenants and investors focus demand for office space in a flight to quality and efficiency. (Check out the themes that shape the U.S. skyline.)

Though the direct vacancy rate for Phoenix’s Skyline still sits at 22.9 percent, sights are set on rapidly improving Skylines across the nation—where competition for office properties in 2013 propelled the national vacancy level to an average 13.4 percent.

“If you look at the JLL Skyline Clock, Phoenix sits squarely between the ‘Bottoming Phase’ and the ‘Rising Phase’,” said John Bonnell, Managing Director in the Phoenix office of JLL. “This is a perfect storm for tenants who appreciate the price differential, central location and amenities that Downtown and Midtown have to offer. It’s an opportunity that we remind our clients about constantly, and one that we expect to continue throughout 2014, since new construction is also very limited.”

In spite of tightening market fundamentals, construction activity in Skylines across the nation remains low. Seven U.S. Skylines—including Phoenix—show no current development. Two Skylines indicate just one proposed project.

”The lack of development is causing a space crunch on each end of the spectrum,” said John Sikaitis, Managing Director of Research at JLL. “Trophy properties are far outperforming the broader market with respect to occupancy levels and rents, and a similar tightening exists in value-add properties. This squeeze from both ends is expected to have a significant impact on the properties in the middle as tenants are being priced out of their former go-to options.”

Read Phoenix_Skyline_Report

Oblique & Renderings of Airport I-10-1

Groundbreaking Arrives for Phase I of Airport I-10 Business Park

Groundbreaking day has arrived for the first phase of Airport I-10—a Wentworth Property Company/Clarion Partners Class-A industrial project being leased by the Phoenix office of JLL that, at completion, will represent one of the largest Sky Harbor Airport-area speculative industrial developments in Phoenix history.
Located at the northwest corner of 24th Street and Rio Salado, Phase I of Airport I-10 Business Park includes three Class A industrial buildings totalling more than 600,000 square feet (277,954 square feet, 169,109 square feet and 156,000 square feet). Phase I of the project is slated for completion in the fall of 2014. At build out, the 58-acre site will comprise five Class A industrial buildings totalling 920,584 square feet.
“This is the last large, developable parcel left in the Sky Harbor International Airport submarket—an area that consistently ranks among the Valley’s top industrial locations,” said Wentworth Property Company Principal James R. Wentworth. “Airport I-10 is already garnering great interest. With Phoenix’s continued population and job growth, we expect this demand to do nothing but rise in the years ahead.”
According to JLL research, the Sky Harbor Airport submarket absorbed approximately 1 million square feet of industrial space last year—almost 30 percent of the more than 3.5 million total square feet of industrial space absorbed Valley-wide in 2013.
Airport I-10 will offer a modern environment for corporate users and will be fully equipped with state-of-the-art features such as ESFR sprinkler systems, 30- to 32-foot clear heights, cross-dock loading and 140- to 200-foot truck courts.
“About 90 percent of the buildings in the airport submarket were built before 2000 and lack the modern features that today’s users are looking for,” said JLL Executive Vice President Pat Harlan, who serves as an exclusive leasing broker for the project along with JLL Executive Vice President Steve Sayre, JLL Associate Kyle Westfall and JLL Managing Director Mark Detmer. “Airport I-10 delivers those benefits at a central location—a site that is truly at ‘main-and-main’ for industrial real estate.”
“Users are looking for space in the 50,000- to 300,000-square-foot range and there simply isn’t the product to accommodate that demand,” said Harlan.

JLL 21410 Deer Valley, WEB

JLL Brokers $17M Meritex Entry into Phoenix Industrial Market

Meritex announced today its entry into the Phoenix market with the acquisition of a two-building industrial portfolio totaling 193,366 SF. The Class-A properties are located at 21410 and 21415 N. 15th Ln. in Deer Valley, Ariz.

“We are excited about the addition of the Deer Valley properties to our portfolio and our entry into the Phoenix market,” commented Dan Williams, chief investment officer for Meritex in Minneapolis. “The acquisition of these assets complements our investment strategy of entering into markets that provide opportunity for growth, expansion and diversification of our industrial portfolio. Meritex continues to seek additional investment opportunities in the Phoenix market.”  JLL managing directors Tony Lydon and Pat Harlan represented Meritex in the transaction, which closed on March 7.

Meritex has selected Metro Commercial Properties to continue management of the properties.  “We look forward to working with Metro Commercial Properties,” commented Arvid Povilaitis, chief operating officer of Meritex.  “The properties are located in the thriving Deer Valley submarket and have a proven track record of consistent demand. The properties are currently 97% occupied by 10 tenants including a recent tenant expansion of nearly 15,000 SF.”  John Pompay of Cassidy Turley has been retained as the listing agent for the properties.

7200 West Buckeye Rd, JLL

JLL Brokers $26.25M Deal of Industrial Property

Phoenix industrial absorption rates may have hiccupped mid year, but investors are not deterred, as illustrated by the sale of 7200 W. Buckeye Rd. in southwest Phoenix. Jones Lang LaSalle’s Capital Markets experts facilitated the sale on behalf of the owner this week. 7200 West Buckeye Road Industrial Investors, LLC purchased the 400,000 SF industrial property for $26.25M.

Jones Lang LaSalle Managing Directors Mark Detmer and Bo Mills represented the buyer and the seller.

Located on Buckeye Road within minutes of Interstate 10, 7200 Buckeye Road is 100 percent leased through 2017 to national credit tenant, Home Depot U.S.A., Inc. The building was built in 2009 and includes state-of-the-art features such as 32’ clear height, ESFR sprinklers, cross dock loading, concrete truck courts and trailer storage.

“This industrial project competes toe-to-toe with the best assets in the Valley,” said Detmer. “As our industrial market continues to strengthen, this property—like so many others in Phoenix—will deliver on its upside potential through rent growth, tenant retention and steadily rising values.”

According to JLL research, industrial vacancy levels in southwest Phoenix are almost 10 percent lower than they were two years ago, with more than 10 MSF of requirements still actively touring the market for space. As of September, the firm’s quarterly Phoenix Industrial Market Report shows the southwest Phoenix warehouse/distribution inventory at 15.6 percent total vacancy and average total asking rents of $0.92 per-square-foot. This compares to an overall Valley warehouse/distribution vacancy rate of 12.7 percent and average asking rents of $0.43 per-square-foot.

FairmontCommerceCet

DAUM Completes 83,200 SF Lease in Fairmont Commerce Center

DAUM Commercial Real Estate Services announced that it represented the tenant, MXD Group, in the leasing of the Fairmont Commerce Center, an 83,200 sq. ft. building located at 440-444 W. Fairmont Drive in Tempe.

Steve McKendry, Kirk Jenkins and Trevor McKendry of DAUM’s Phoenix office exclusively represented MXD Group in the transaction.

MXD Group specializes in final mile delivery logistics solutions for North American retail brands across the consumer electronics, furniture and appliance segments.  The business coordinates and executes approximately 2.3 million non-conveyable product deliveries annually utilizing a nationwide network of professional managed and certified independent contractors and agents.  The newly rebranded business is a leader in white glove home delivery and retail replenishment solutions and services.

Broadway Ind Portfolio

Jones Lang LaSalle Closes $22 Million Portfolio Sale

Capital Markets experts in the Phoenix office of Jones Lang LaSalle (JLL) have completed a $22.1 million sale of Broadway Industrial Portfolio, totalling three Class A buildings and 308,038 square feet in Tempe, Ariz. The deal is JLL’s second investment sale in the area this quarter, accentuating the strength and draw of the submarket’s commercial real estate inventory.

Jones Lang LaSalle Managing Directors Mark Detmer and Bo Mills represented the property seller, San Francisco-based Prologis, Inc. The buyer is DCT Industrial Trust.

Broadway Industrial Portfolio encompasses an 110,000-square-foot building at 1005 W. Alameda Dr; a 96,437-square-foot building at 2910 S. Hardy Drive; and a 101,601-square-foot building at 2925 S. Roosevelt St., all in Tempe. Each building is a Class A, institutional quality asset offering manufacturing, distribution and office space. The properties are also all located directly off of Interstate 10 and fully occupied, with no near-term rollover, to tenants including United Stationers Supply Co., ACI Plastics, Inc., Misty Mate, Inc. and Triumph Group, Inc.

“These buildings are exceptional in that they combine outstanding functionality and full occupancy with a true Class A image in an infill location,” said Detmer. “This includes access—within minutes—to many of the key amenities that a high-end industrial user might need: an extensive freeway network, international airport, deep labor pool and host of retail opportunities.”

In addition, the project is located within the Southeast Valley, an area that over the last decade has remained one of the nation’s fastest growing regions for industrial and technology companies, and according to JLL is well situated for long-term stability.

Jones Lang LaSalle Executive Vice Presidents Pat Harlan and Steve Sayre, and Associate Kyle Westfall, will serve as the exclusive leasing brokers for the property buyer on behalf of DCT Industrial Trust.

This is the second investment sale closed by JLL in the Tempe submarket this quarter. In July, the firm completed a $27.1 million sale of Broadway 101 Office Park, a deal that was driven by high market demand and fundamentals reminiscent of pre-recession transactions.

Jones Lang LaSalle is a leader in the Phoenix commercial real estate market. Employing nearly 400 of the region’s most recognized industry experts, the firm offers office and industrial brokerage, tenant representation, facility and investment management, capital markets and development services. In 2012, the Phoenix team completed 9 million square feet in lease transactions valued at $458 million, directed $63 million in project management and currently leases and/or manages a 19.8 million-square-foot portfolio. For more news, videos and research resources on Jones Lang LaSalle, please visit the firm’s U.S. media center webpage.

Jones Lang LaSalle Capital Markets is a full-service global provider of capital solutions for real estate investors and occupiers. The firm’s in-depth local market and global investor knowledge delivers the best-in-class solutions for clients — whether a sale, financing, repositioning, advisory or recapitalization execution. In 2012 alone, Jones Lang LaSalle Capital Markets completed $63 billion in investment sale and debt and equity transactions globally. The firm’s dealmakers completed $60 billion in global investment sales and buy-side transactions, equating to nearly $240 million of investment trades completed every working day around the globe. The firm’s Capital Markets team comprises more than 1,300 specialists, operating all over the globe.

JLL - W. Buckeye

JLL completes 240,000 SF industrial lease for CTDI

The Phoenix office of Jones Lang LaSalle completed a 240,000 SF industrial lease in Tolleson for Pennsylvania-based Communications Test Design, Inc. (CTDI).

The long-term lease is part of a national third-party service contract with Cox Communications that will generate approximately 200 new local jobs and fill one of the last three existing, scalable industrial building solutions in the Phoenix market.

“Demand is filling Phoenix’s larger blocks of available industrial space,” said Jones Lang LaSalle Managing Director Marc Hertzberg. “When we evaluated CTDI’s market options, there were really only three viable spaces that could fill their needs. Now that this lease has been executed, there are only two such spaces left in Phoenix for similar users.”

Hertzberg, SIOR, represented CTDI in the lease negotiations with industrial team partner Anthony J. Lydon, SIOR and also a Managing Director in the Phoenix office of Jones Lang LaSalle, and Jackson Cross Partners, which represents CTDI nationally.

The Phoenix CTDI lease is one that will allow the company to service, repair or recycle Cox Communications network equipment, creating jobs ranging from operations to engineering to warehousing, and supporting a centralization/standardization process for Cox.

“Being just 1.5 miles off of I-10 was a major draw for CTDI, who needs efficient Valleywide access to serve Cox customers and business lines,” Lydon said. “LBA’s creativity and financial strength was another deciding factor. It will allow CTDI to occupy their new building very quickly.”

CTDI will take possession of its new space by 4Q 2012. The building is at 8602 W. Buckeye Rd. and is comprised of 238,000 SF of warehouse space and 2,695 SF of speculative office space. It is part of the Westside Business Park, a 66-acre, 1.1 MSF project that is home to other leading warehouse tenants including Staples, CostCo, Bose and International Paper.

Black Canyon

JLL Completes Lease For 25,678 SF At Black Canyon Corporate Center

The Phoenix office of Jones Lang LaSalle completed a 25,678 SF, 5-year office lease at Black Canyon Corporate Center in Phoenix.

The expansion doubles the size of tenant TeleTech Holdings, Inc., a leading global provider of technology enabled customer experience solutions that operates a call center for subsidiary company, Revana, out of the Black Canyon Corporate Center space.

Managing Directors John Bonnell and Don Mudd, and Vice President Brett Abramson, in the Phoenix office of Jones LaSalle represented the building owner, Parallel Capital Partners. TeleTech was represented by CBRE brokers Chris Hook in Phoenix and Lee Diamond in Denver.

Located at 16404 N. Black Canyon Highway in Phoenix, the 219,000 SF Black Canyon Corporate Center sits between Greenway and Bell roads, with direct frontage to Interstate 17. The property is also less than two miles from the I-17/Loop 101 interchange and has more than 2.5 MSF of retail within a two-mile radius. Property signage is visible from I-17.

“We’ve seen a significant uptick this year in tenant interest across the Phoenix office market, with no signs of falling off,” Bonnell said. “This kind of consistent pressure can quickly drive vacancies down and rents up, and provide some long-awaited relief.”

According to the Jones Lang LaSalle Mid-Year Office Market Overview, overall direct office market vacancy continued to fall from 26.1% down to 25.3% during the second quarter. With no new office completions happening, Phoenix net absorption for the second quarter 2012 hit almost 600,000 SF.

“This compares very favorably to the negative 565,000 square feet of absorption experienced during first quarter 2012,” said Bonnell. “TeleTech moved on a great expansion opportunity, at a property that’s well suited for its call center needs, at a very good time in the market cycle.”

A real estate investment and operating firm that focuses on office, industrial and retail property acquisition, Parallel Capital Partners owns Black Canyon Corporate Center, as well as the City Square Office Towers (722,000 RSF in three buildings; located in Phoenix’s Midtown submarket) and US Bank Center building (364,773 RSF at 101 North in the heart of Downtown Phoenix.) Bonnell, Mudd and Abramson are the exclusive leasing brokers for all three buildings.

Jones Lang LaSalle is a leader in the Phoenix commercial real estate market. Employing 344 of the area’s most recognized industry experts, the firm offers office and industrial brokerage, tenant representation, facility and investment management, capital markets and development services.