Tag Archives: Will Strong

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.”

8313 Latham, WEB

Ryan West Business Park sells for $14.59M

Cassidy Turley announced today that a subsidiary of Cohen Asset Management purchased Ryan West Business Park, a ±242,863 square foot warehouse distribution building at 8313 Latham in Tolleson for $14,591,460 from EG Properties, LLC. Ryan Companies US, Inc’s (Ryan) Real Estate Management group was the asset manager for the seller and will continue to serve as property manager for the buyer. Will Strong, Mike Haenel and Andy Markham, SIOR of Cassidy Turley procured the investment sale transaction, bringing the buyer, Cohen, and the seller together.

“Phoenix’s industrial market continues to attract capital searching for assets with credit tenancy, modern features and a history of being institutionally managed and maintained. Ryan West Business Park fits that description,” according to Will Strong, Vice President with Cassidy Turley’s Industrial Services Group. “Located less than one quarter mile south of I-10, this asset’s location is in the heart of the Southwest Phoenix distribution market and will continue to benefit from strong local labor, improving market fundamentals, and access to the Southwestern U.S.”

Built in 2001 by Ryan, the project was named Ryan West Business Park. Shortly after completion, Ryan was awarded the NAIOP Arizona Industrial Building of the Year for the development which features tilt panel construction, high performance reflective glass, a 30-foot clear height, 59 front-loaded fully-gated and -secured docks/truck wells, 150 feet of truck maneuverability, 17,836 square feet of refrigerator/freezer space and was designed to accommodate future two-story uses.

“Having a strong credit tenant like Circle K in a portion of the building, the ability to lease the remaining 61,713 square feet and projected rental rate growth in this segment made this a strategic acquisition for the buyer,” said Strong.

This is the second acquisition Cassidy Turley has secured for Cohen in 2014 and will be the fifth industrial building purchase in the last seven months by their firm. Cassidy Turley represented them in May for the $29 million purchase of a three-property industrial portfolio, totaling 174,644 square feet and 12.31-acres, from Alliance Commercial Properties.

Cassidy Turley will retain the leasing assignment for the remaining space at the Latham property.

3701 E  University Drive

Cohen purchases industrial portfolio for $29M

Cassidy Turley announced today that Cohen Asset Management purchased a three-property, high-tech industrial portfolio in Phoenix for $29 million from Alliance Commercial Partners (ACP). Will Strong, Mike Haenel and Andy Markham, SIOR of Cassidy Turley procured the investment sale transaction, bringing the buyer, Cohen, and the seller, ACP together.

The portfolio includes three 100% NNN leased state-of-the-art, single tenant high-tech industrial assets totaling ±174,644 square feet and 12.31 acres. The buildings are located at 3601 and 3701 E. University Dr. in Phoenix and 405 W. Geneva Dr. in Tempe, Ariz. Microsemi occupies the 73,729-square-foot building at 3601 E. University, and FlipChip International occupies the adjacent 52,027-square-foot building at 3701 E. University. The 48,908-square-foot Tempe property is occupied by MedPlast. The institutionally maintained and managed three property portfolio of buildings was built between 1996 and 1998.

“All three properties are highly functional, leased long term to quality tenants and are strategically located,” Strong said.

“The high-tech nature of the properties offers exceptional features that include heavy power, abundant parking and the ability for tenants to grow within them. In addition, these assets have a Class A image, are close to an abundance of retail amenities and benefit from an extensive labor pool.”

All three properties are located in mature, established industrial areas, with the two University buildings located in Southbank Business Park that has direct access to Sky Harbor International Airport, Interstate 10, Interstate 17 and Arizona SR-143. The Geneva property is located in the Broadway Industrial Park and has excellent access to I-10 and Arizona SR-143.

Will Strong

Will Strong Joins Cassidy Turley's Industrial Group

 

Cassidy Turley announced that Will Strong has joined the firm’s Arizona office as a vice president in the Industrial Group.

Strong will be combining his brokerage practice with one of the companies top producing Industrial teams, Mike Haenel and Andy Markham, SIOR. The new team will focus on all aspects of industrial brokerage services including development, project leasing and tenant representation throughout Metro Phoenix.

“Will has made a big impact in the market,” said Bryon R. Carney, President & Managing Principal for Cassidy Turley in Arizona. “He is an accomplished professional with an excellent reputation in the commercial real estate industry. We are very happy to welcome him to our office.”

Said Strong: “I am excited to join Cassidy Turley and team up with Mike Haenel and Andy Markham. I know that I am part of a firm whose focus is on the client and providing them with best-in- class services.”

Strong has more than 5 years of brokerage experience, all with Cushman & Wakefield, and in the first few years of his career became the C&W, NAIOP and Arizona Commercial Real Estate Magazine’s Rookie of the Year.

An active member of NAIOP, he serves on the group’s Membership and Developing Leaders Steering Committees. He is a mentor with Arizona Quest for Kids, which helps prepare underprivileged students for success in higher education. He is a graduate of Arizona State University.

 

2235 S. Central Phoenix

Cushman & Wakefield Completes Sale Of 80,000 SF Industrial Facility In Phoenix

APS BioGroup acquired 2235 S. Central Ave. in Phoenix.

Cushman & Wakefield industrial broker Will Strong arranged the acquisition on behalf of the buyer. The seller, The Peiterson Limited Partnership of Las Vegas, was represented in-house by Loren Peiterson.

For APS BioGroup, the acquisition marks a relocation of its headquarters and expansion of its operations within Phoenix. APS BioGroup is a manufacturer of health products and the world’s largest producer of colostrum products.

“As the company continues to grow, APS BioGroup required a substantial greater amount of space for its administrative and manufacturing operations,” Strong said. “With this transaction, the company went from leasing a 58,000 SF space to owning its own 80,000 SF facility – relocating this Arizona based company’s headquarters. Prior to moving into its new headquarters building, APS BioGroup plans to construct a 8,000 SF addition to the building. So, the total size will be 88,000 SF.

“The site selection process encompassed nearly a dozen buildings along the I-10 corridor in Phoenix,” said Strong. “APS BioGroup ultimately selected this building because of its functionality, corporate image and location.”

The company’s new home base is just off I-17 and Central Avenue in the heart of Phoenix’s industrial market. Situated on 4.5 acres, “the building is accessible to every major freeway, has great visibility, and is next to Phoenix Sky Harbor International Airport,” Strong said.

The timing of the acquisition was fortuitous.

“There are not as many buildings available now as before,” said Strong. “Activity has been increasing, the market has been getting tighter, and this was an opportunity to purchase a great building at a good price as conditions start to improve.”

Cushman & Wakefield’s second quarter industrial market statistics show investment sales transactions currently 48% higher with 53.7% more square footage compared to a year ago. Leasing activity has rebounded as well, with the market showing three times the absorption in the second quarter of 2012 over the first quarter.

“User and investment sales volume has been consistently growing through the first two quarters of the year,” Strong said.