Tag Archives: Marc Hertzberg

Architectural Photography by Michael Baxter, Baxter Imaging LLC

Tuesday Morning Corp. signs 593KSF spec lease

Liberty Property Trust announced that Tuesday Morning Corporation has signed a 10-year lease for 593,600 square feet at Liberty Logistics Center I in Phoenix. The national retail chain will occupy the entire facility, located at 563 S. 63rd Avenue, in September.

Liberty acquired the building in 2013 and marketed the facility to potential distribution center users looking to expand in or relocate to Phoenix.

“The Southwest Phoenix Industrial submarket has been poised for rapid growth and we are delighted that Tuesday Moring has chosen Phoenix, and its quality of life amenities, over other cities that were in play for the company’s new West Coast distribution center,” said John DiVall, senior vice president at Liberty Property Trust. “Liberty Logistics Center I exceeds the logistics industry’s demands for today’s multi-channel fulfillment needs. It is a one-of-a kind facility.”

Liberty Logistics Center I is a state of the art LEED® facility that features cross-dock loading, 32’ clear heights, a fully gated concrete truck court, seven points of ingress and egress, R-19 insulation and skylights on 2-percent of the roof.

“We are excited to be opening our new Phoenix facility which will serve our stores in the Western United States. This is an important step in the building of our overall supply chain strategy which will ultimately involve a new facility serving the East Coast and a replacement of our current Dallas distribution center with a new state of the art center,” said Douglas B. Sullivan, senior vice president of real estate for Tuesday Morning Corporation.

With its efficient highway system, ample labor pool and proximity to California, demand for industrial space in Greater Phoenix continues to exceed available product on the market.

“After exploring numerous markets in the Western U.S., Tuesday Morning ultimately selected Phoenix as a result of a vast workforce and strong talent base in Greater Phoenix,” said Chris Camacho, president and CEO of the Greater Phoenix Economic Council. “The new logistics center in Phoenix will provide hundreds of new jobs for the region and added connectivity to a large customer base. We’re excited to welcome them to Greater Phoenix.”

Don MacWilliam, Payson MacWilliam and Tom Woods of Colliers International represented Tuesday Morning and Marc Hertzberg and Tony Lydon of JLL represented Liberty in the transaction. Megan Creecy-Herman managed the transaction for Liberty.

Tiger Industrial Center, via ViaWest Group

ViaWest Group acquires Tiger Industrial Center

ViaWest Group announced the recent acquisition of two multi-tenant, industrial buildings collectively referred to as Tiger Industrial Center. Located at 4901 & 4929 W. Van Buren, the complex is comprised of 103,064 SF. Sold on December 30, 2014, Phoenix-based ViaWest Group paid $4.55MM acquisition. This is the first acquisition in ViaWest’s new fund focused on the purchase of industrial assets in the Southwest U.S. Two other assets are in escrow presently and will close this month. The seller was KTR Arizona LLC, and the buyer and seller were both represented by Tony Lydon, Marc Hertzberg and Riley Gilbert at Jones Lang LaSalle.

Tiger Industrial Center is located at the southeast corner of Van Buren Street and 51st Avenue, just south of a full diamond interchange at the I-10 Freeway. Currently 16 percent leased, the subject is situated within one of the largest industrial submarkets in Phoenix.

ViaWest plans to make some strategic improvements to the property and lease the balance of the space to tenants needing warehousing and manufacturing uses. Tony Lydon, Marc Hertzberg and Riley Gilbert at JLL will continue leasing the property on behalf of ViaWest.

“This property is a great fit as the first investment in our new fund, which is focused on acquisitions of well-located general industrial and multi-family properties, in recovering secondary markets in the Southwestern U.S., at significant discounts to replacement cost,” says Gary Linhart, Founding Principal at ViaWest Group.

Marc Hertzberg of JLL expressed, “This asset is uniquely positioned to cater to 10,000 to 75,000 SF tenants that want a prime, infill location that provides all the function needed in today’s world at extremely competitive rental rates.” ViaWest Group intends to hold the property for investment and will serve as the property manager and asset manager.

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.

Coldwater Depot

Industrial Sector Suits Up

If Q1 reports are any indication, the Phoenix metro’s industrial sector is suiting up for an interesting year. Intel finished construction on its 2.2MSF manufacturing fab in Chandler, Ariz. It sits vacant with hopes for adaptations into a manufacturing facility for chips.

The 700KSF Buckeye Business Center is under construction without any tenants. Last year, Turner Spectrum Ridge broke group on eight industrial buildings that totaled 120KSF of space in Deer Valley. And WinCo Warehouse is expected to complete a 800KSF distribution facility in Q2 2014. While there are a handful of tenants looking for large industrial spaces, a majority of market demand lingers between 20KSF and 100KSF.

Still, Phoenix ranks No. 3 in the country for year-over-year construction completion increases, according to Cushman & Wakefield’s Q1 2014 report. In Q1 2013, 316KSF of industrial product was completed. In Q1 2014, that number jumped to 2.1MSF. Another 2.7MSF is being developed. Industrial vacancy in Phoenix is at 10.5 percent, still above the national average (7.4 percent), Cushman & Wakefield reports. Vacancy reached a two-year high, reports Colliers International, and vacancy in buildings larger than 100KSF has spiked to 16 percent, while vacancy in buildings of 200KSF and larger has more than doubled in the past year to 17.6 percent.

“But the glass is half full,” says Marc Hertzberg, managing director of industrial/supply chain and logistics solutions at JLL. “Phoenix remains a great place for labor, lower operating costs and quality of life. Economic conditions are improving and we expect to bounce back.”

“Phoenix typically absorbs somewhere between 3.5MSF and 4.5MSF of industrial space per year,” says Hertzberg. “We’ve been off this mark for about 12 months now, but we are not the only market in this position. Our large-scale industrial sector is a mirror image of a phenomenon taking place in southern California, and particularly the Inland Empire, which usually absorbs as much industrial space in one quarter, approximately 4MSF, as Phoenix does all year. At almost mid-year, that market has only absorbed 3.4MSF.”

The sweet spot, he says, are the small- and mid-size users who need between 75KSF and 200KSF. “The small- and mid-size users are typically made up of higher-wage specialized employers like medical and high-tech companies,” Hertzberg says. “They are looking for fully-air conditioned flex industrial space that is close to quality labor, vendors and transportation, and they are willing to pay prices of approximately 10 to 20 percent higher than the big-box users in the areas of west Phoenix to secure those factors.”
Build-to-suit construction is what companies need to factor into their projections, says Hertzberg.

“In the build-to-suit sector, vertical markets like e-commerce and food and beverage are providing us with some positive absorption, however this does nothing to fill existing space,” he says. “Rather, it is adding specialized building inventory to our market—product that is built specifically for its user versus the specs of an existing warehouse.”

“We are seeing an aggressive level of capital looking to be placed in Phoenix,” says Cassidy Turley’s Industrial Group Vice President Will Strong. Companies are looking toward build-to-suit options over taking existing buildings, he says.

“New industrial developments are pushing higher on clear height, bigger on truck courts, and are continuing to find better, more efficient and modern ways to meet the tenants’ changing facility needs,” he says. “We are seeing companies increase employment density for fulfillment centers, which in-turn pushes the parking requirements higher than a traditional warehouse user would have.”

Spec is also being leased up. Coldwater Depot in Avondale, Ariz., the Trammel Crow-Clarion project, entered the market with 600KSF in spec development and leased out to Conn Appliances and SanMar Corp.

“Capital markets are really looking at Phoenix hard right now because they can’t find anything to buy in other markets that pencils out,” Strong says. “This has pushed investors to look not only at traditional listings but also off-market opportunities. Whether current owners will sell is another question. Some are contemplating offers, but even if they were to sell they’d need to determine where to put their money next, and if that investment has the same kind of upside potential as Phoenix industrial space.”

Liberty Tolleson Center

Liberty Tolleson Center reaches 100 percent occupancy

Liberty Property Trust announced it has signed a lease with Green Light Direct Services at Liberty Tolleson Center, bringing the 200KSF project to 100 percent occupancy.

Green Light Direct Services will move into its new location, 8601 W. Washington Street, in October. Rick Collins of CD Commercial Advisors represented Green Light Direct Services and Tony Lydon, Marc Hertzberg and Riley Gilbert of JLL represented Liberty Property Trust in the transaction.

“There continues to be strong interest in high quality assets in prime locations throughout our Arizona portfolio,” said John DiVall, senior vice president and city manager for Liberty’s Arizona region.  “We’ve seen momentum in the Southwest Valley returning as of late, spanning from 50,000 square feet and up.”

Since January, Liberty has closed eight lease agreements totaling more than 500,000 square feet across the Arizona region.

rsz_estrella_logistics_center

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.