CBRE has arranged $35.5 million in financing for a ground-up spec construction project called Converge Logistics Center in Phoenix, Ariz. The property is comprised of three to-be-built, Class-A industrial buildings that will feature approximately 500,000 square feet of rentable space.
Mike Walker and Brad Zampa with CBRE Capital Markets’ Debt & Structured Finance group arranged the loan on behalf of the sponsors, ViaWest Group and its institutional capital partner. The non-recourse, floating rate loan has a three-year term with two extension options and was secured through a regional bank headquartered in the southern U.S.
Converge Logistics Center will be built on 28.6 acres, which the sponsor controls through a ground lease with the Kyrene Elementary School District. Individual buildings will range from 140,000 sq. ft. to 210,000 sq. ft. and may be leased to a single tenant or are divisible to 23,500 sq. ft for multi-tenant use. The buildings will have 32 ft. clear heights, a combination of dock-high and grade-level doors and office suites at the front. Construction on all three buildings broke ground in January and is estimated to complete in the fourth quarter of 2022.
“We’re thrilled with the outcome on the Converge construction financing. The institutional expertise and local track record of the joint venture had both regional and money center banks competing aggressively for this opportunity. Lenders were excited to get exposure to the incredibly strong fundamentals in the Phoenix industrial market,” said Mike Walker, executive vice president, CBRE.
The industrial park is located at 15175 S. 50th St. in Phoenix’s Southeast Valley submarket, home to the metro area’s second-largest industrial presence with nearly 80 million sq. ft. of industrial space. The property borders the I-10 freeway and is within a short walk of the Ahwatukee Foothills Towne Center, home to a variety of restaurants, shop and entertainment.
“With the growing industrial market in Phoenix, Converge Logistics Center helps fill the demand for small to medium tenants,” said Danny Swancey, partner, ViaWest Group.
Converge Logistics Center is the sponsorship’s third investment together in the Phoenix area. Metro Phoenix’s industrial market recorded over 21 million sq. ft. of positive net absorption in 2021, a new record for the region, according to CBRE research.