CBRE announced the sale of Fiesta Tech Center, a 243,370-square-foot manufacturing and office facility occupied by Keter Plastics in Gilbert, Ariz. Nearon Enterprises acquired the asset from Los Angeles-based Fiesta Venture LP for $18.05 million.
CBRE’s Mike Parker, of the Phoenix office partnered with Matt Pourcho, Gary Stache, Doug Mack, and Anthony DeLorenzo from CBRE’s IPSOCAL Investment Properties team out of Southern California in marketing the investment opportunity for the seller. Eight of the 11 offers came from California-based investors. The buyer was self-represented in the transaction.
Located within Fiesta Tech Business Park at 1300 N. Fiesta Blvd., Fiesta Tech Center is 100 percent leased to Keter Plastics, a subsidiary of Keter U.S., Inc., on a 12-year corporate-guaranteed, absolute triple-net lease. The manufacturer and marketer of resin-based household and garden consumer products utilizes the site for warehousing, manufacturing and administrative office use. Keter leases an additional 120,700 square feet of space adjacent to the property at 1343 N. Colorado Street, which serves as the tenant’s West Coast distribution hub.
“The seller had just minted a new 12-year lease and was facing maturing debt in the first quarter of 2019, making it an optimal time for them to sell,” said CBRE’s Parker. “The buyer appreciated the advantage of buying the property significantly below replacement value, securing a stable cash flow with an international tenant for the long term. The property also provides the buyer with the ability to enhance value through the construction of additional buildings on the site. It was the buyer’s first foray into the Metro Phoenix market and the business fundamentals were sound from a labor, city and investment perspective.”
Originally constructed as a build-to-suit plastic manufacturing plant, the facility features 150,000 square feet of production/assembly space, an on-site cafeteria, climate-controlled distribution/warehouse space, and grade and truck-well loading with 24-foot clear height.
Fiesta Tech Center is located in the Gilbert submarket, which was ranked among the fastest growing cities in the U.S. The property is less than one mile from the US 60 and Loop 101 freeways and offers convenient access to Interstate 10.
The metro Phoenix industrial market experienced nearly 9.8 million square feet of net absorption in 2018, according to CBRE Research. Robust demand pushed down market-wide vacancy 30 basis points annually to 6.5 percent. Most impressively, vacancy fell while industrial completions reached their highest level since 2008, with more than 9 million square feet delivered during the year.