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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.”

Kitchen Appliances - Scottsdale Living Magazine Winter 2012

6 Tech-Savvy, Kitchen Appliances For a Contemporary Look

How Cool is This?: 6 tech-savvy and unique kitchen appliances to give your kitchen that contemporary look


Wolf Convection Steam Oven

Kitchen Appliances

Coming in early 2012, convection steam ovens combine steam and convection cooking options to the kitchen. With technology that monitors time, temperature and environment by sensing the quantity, size and shape of the food, the oven will make cooking easier.

Price: $3,500
Where to buy: Sub-Zero and Wolf, 15570 N. 83rd Way, Scottsdale
subzero-wolf.com


Kitchen appliancesMiele Coffee Built In Coffee System

This built-in stainless steel coffee not only makes coffee for two, but it also includes an integrated milk tank, which keeps milk cool for up to 12 hours without any loss of quality.

Price: $3,249
Where to buy: Miele Scottsdale Gallery, 7550 E. Greenway Rd., #100, Scottsdale
mieleusa.com


KitchenAid Slow Cook Warming Drawer

Not only can this warming drawer keep food warm for when the family is running late, it also can be used as a slow cooker.

Price: $1,249
Where to buy: Genuine Home Appliance, Inc., 21001 N. Tatum Blvd., Phoenix
kitchenaid.com


U-Line Modular 3000 Series

This 18” modular fridge allows refrigeration to be hidden in the kitchen and placed where the contents are most needed. It also provides five distinct food and beverage settings.

Price: $2,629-$2,798
Where to buy: SunWest Appliance Distributing, 8370 S. Kyrene Rd., #107, Tempe
sunwestdist.net


Elica Collection 20” Wide, Evolution Floating Hood Model

Appearing to be a light fixture, this light doubles as a ventilation system — and an air purifier. This gives your kitchen a contemporary, minimalistic look.

Price: $1,800
Where to buy: SunWest Appliance Distributing, 8370 S. Kyrene Rd., #107, Tempe
sunwestdist.net


Kitchen appliancesWolf 48” Dual Fuel Range — Sub-Zero

This top-of-the line Wolf range has two ovens; this means you can bake more than one meal at a time at varying temperatures.

Price: $12,885-$14,530 (depending on top configuration)
Where to buy: Sub-Zero and Wolf, 15570 N. 83rd Way, Scottsdale
subzero-wolf.com


Source: Scottsdale Living research

Scottsdale Living Magazine Winter 2012

Minimalistic Kitchens, Scottsdale Living Magazine Winter 2012

Homeowners Go For A Minimalistic, Tech-Savvy Kitchen

With homeowners putting more time and money into their abodes, kitchens are becoming more sustainable, technologically advanced and filled with cool appliances. One current trend is giving the kitchen a facelift with a minimalistic look, which tends to give one of the most popular rooms in the house a contemporary, European feel.

“Different people have a different idea of what contemporary is,” says Pam Josey, director of corporate relations and education for SunWest Appliance Distributing in Tempe. There are different forms of the contemporary look homeowners go for, but most tend to be a softer form of contemporary, which involves the presence of clean, functional
appliances that help prevent the kitchen from feeling lifeless, Josey says. One way to get that minimalistic / contemporary look? Hide appliances.

Minimalistic kitchensOne appliance that an increasing number of homeowners are tucking away is the refrigerator. Manufacturers are not only downsizing refrigerators in order to hide them within a kitchen’s cabinetry, but they are also strategically placing them around the kitchen. This is called modular refrigeration.

Refrigerators are placed where its contents are most conveniently served, such as a unit that contains only vegetables next to the vegetable sink. Another example is placing refrigerators containing drinks at the end of an island. Having multiple small refrigerators allows easy access to the foods needed in a certain area in the kitchen.

Refrigerators are also taking a step forward in terms of technology. Designers are adding Wi-Fi to them, which will inform owners when the door is left ajar. Other appliances have USB ports that update and search for problems the appliance may have.

However, among all of the kitchen appliances, coffee makers are making the biggest splash. “Built-in coffee makers are kind of the hot appliance everyone wants to get their hands on,” says Megan Still of Allstate Appliance in Scottsdale. Built-in coffee makers allow for increased countertop space and enhance the minimalistic look.

Not only are homeowners saving money with built-in coffee makers by avoiding the morning trip to the coffee shop, they are also saving money by investing in environmentally friendly appliances.

Companies are using recycled material, making appliances more energy efficient and decreasing water consumption. They are also helping to lower the running cost as well as the amount of energy it takes to run kitchen appliances, according to Still, in turn decreasing your electric bill.

As an example, Sub-Zero markets a line of fridges that cost less than $75 a year to run compared with the average $126 a year. As for dishwashers, its water usage is lower than the average 5.8 gallons required for new dishwashers, some using just two gallons of water per load.

However, homeowners are still interested in receiving the “best quality in the best price they can get it in,” Josey says. “People are willing to pay more for something that’s going to last longer,” Still adds, because people are staying in their houses longer instead of moving around.

Upcoming trends include the use of less upper cabinets, linear cabinets and adding pops of color to the kitchen with appliances.

For more information about Allstate Appliance or SunWest Appliance Distributing, visit allstateappliances.com or sunwestdist.net to create your own minimalistic, tech-savvy kitchen.

Scottsdale Living Magazine Winter 2012