Tag Archives: Pat Harlan

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Raise the Roof

Clear heights are soaring on average to about 32 feet among new industrial builds, be it speculative or build-to-suit projects. Some are even climbing as high as 36 or 40 feet.

An extra four feet can increase a tenant’s pallet position, assuming it’s the average 64-inch pallet load, by about 20 percent without changing the amount of floorspace, says JLL Executive Vice President of Supply Chain and Logistics Solutions Pat Harlan.

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Pat Harlan

With sky-high ceilings, occupiers are able to get more out of their square footage than in second-generation buildings constructed in the ‘80s or ‘90s. Since brokers are still pricing by the square foot — and not cubic feet, which would account for the vertical advantage — occupiers are getting a better deal than brokers know how to quantify.

“The reason landlords haven’t done that is it doesn’t make sense,” says Harlan. “Just charge a user a price PSF in open market regardless of clear height. Having a clear height is seen more of a competitive advantage. It increases the likelihood a tenant will lease up.”

Harlan says rent per square foot in industrial buildings with more clear height rent for about 20 to 30 percent more than older buildings with clear heights below 28 feet. These buildings also have smoother, flatter floors, truck maneuverability, trailer storage and corporate image. Additionally, not all tenants that lease within a building will require the full clear height available.

The Airport I-10 industrial project is a total of 600KSF with clear heights of 30 to 32 feet. Harlan says it will be 35 percent leased by the time construction ends.

“We’re encouraging our developers to go as high as possible,” Harlan says. “There’s a percentage of users who want it and it drives the overall value of the real estate because of that. There will be users who go into 32-foot buildings but only rack to 24, but they want that increased capacity down the road.”

Oblique & Renderings of Airport I-10-1

Airport I-10 announces three national tenant leases

Just as Airport I-10’s 600KSF Phase I approaches completion, Wentworth Property Company/Clarion Partners and the Phoenix office of JLL have announced the signing of three major, national tenant leases that bring one of the largest speculative office projects in Phoenix history to more than 35 percent pre-leased.

The new tenants at Airport I-10 include:

• DLS Worldwide, a major, volume-leveraged third-party logistics provider, leasing 78,843 square feet in Building B for a new headquarters, light manufacturing, assembly and distribution facility.

• DHL, the world’s leading postal and logistics group, leasing 40,529 square feet in Building E for a regional parcel delivery hub.

• Pilot Freight Services, a worldwide provider of transportation and logistics services, leasing 31,824 square feet in Building E for centralized pick-up and delivery service operations.

JLL Executive Vice Presidents Pat Harlan and Steve Sayre, and JLL Associate Kyle Westfall represented Wentworth/Clarion in all three leases. Mike Gordon of Cresa represented DLS. John Werstler, Jerry McCormick and Cooper Fratt of CBRE represented Pilot. Jim Wilson of Cushman & Wakefield represented DHL.

The new leases join with a 63,470-square-foot pre-lease completed by JLL in mid-2014 with Anixter International, Inc., a leading global distributor of enterprise cabling and security solutions, electrical and electronic wire and cable, and OEM supply fasteners and other small parts.

Inclusive of Anixter, this brings JLL’s new lease commitments at Airport I-10 to 215,000 total square feet, leaving the project’s three-building, 600,000-square-foot Phase I at 35 percent leased, before construction is even finalized.

“Modern companies want modern buildings. This is making all types of users more sophisticated about what they look for in an industrial location,” said Harlan. “They are requiring the kind of improved function that you get from features like higher clear heights, better overall building layout and better truck maneuverability. Airport I-10 checks all of these boxes, and because of this is attracting tenants making an overall flight to quality – a trend that is happening across the entire industrial market.”

“Airport I-10 was designed to give modern industrial tenants a home in the heart of Phoenix’s industrial distribution network. We couldn’t be more pleased with the companies that have committed to space here,” said Wentworth Property Company Principal James R. Wentworth. “They are a barometer of the types of businesses that we believe will continue to chose Airport I-10 and build out one of the submarket’s best and last industrial parcels.”

Located at the northwest corner of 24th Street and Rio Salado, Airport I-10 Business Park represents the last large, developable parcel left in the Sky Harbor International Airport submarket. Phase I 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). This portion of the project is 35 percent pre-leased to Anixter, DHL, DLS and Pilot.

At build out, the 58-acre Airport I-10 property will include five Class A industrial buildings totalling 920,584 square feet, with a modern environment for corporate users and 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.

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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.