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News release

PHOENIX, AZ

Meet Me in the Middle: JLL Phoenix Predicts the Continued Rise of Mid-Size Industrial

Credits construction industry with one-third of all 2015 deals


PHOENIX, March 9, 2016 – Mid-size users are dominating the Phoenix industrial market, and the construction sector has a heavy hand in that success, says the Phoenix office of JLL. According to the brokerage firm, much of the 5.8 million square feet of industrial space absorbed in the Valley in 2015 went to mid-size users – tenants occupying somewhere between 10,000 and 50,000 square feet.

In this 12-month period, JLL closed 52 mid-size transactions totalling more than 1.27 million square feet. Of that activity, 28.8 percent was with construction-related companies.

“We should be paying a lot of attention to the wants and needs of mid-size industrial users, and to the metered recovery of the construction industry,” said JLL Executive Vice President Pat Harlan. “These are driving forces that are balancing out our market, so that no one factor dominates. It’s creating a very healthy outlook for the balance of the year.”

According to the Arizona Department of Administration, the construction/specialty trades sector had the biggest year-over-year job growth increase in 2015, adding 6,300 new jobs for a gain of 10.5 percent over 2014.

“We’ve been waiting for healing to begin in the Phoenix construction market, and it’s finally here,” said Harlan.

Just some of the construction-related, mid-size deals closed in metro Phoenix by JLL in 2015 are:

  • Superior Pool Products at 955 N. Fiesta Blvd. in Gilbert for 47,969 square feet
  • Diamond Kitchen at West 10 Business Center in Phoenix for 34,733 square feet
  • Door Works at 2605 W. 1st St. in Tempe for 43,690 square feet
  • EcoFasten Solar at 4741 W. Polk St. in Phoenix for 49,975 square feet
  • Trane at 10115 W. Van Buren St. in Phoenix for 37,332 square feet
  • Vivint Solar at 5446 W. Roosevelt St. in Tolleson for 25,964 square feet

“We’re seeing our clients – at projects like Airport I-10, Park Lucero and AZ|60 – actively respond to mid-size tenant demand,” said JLL Vice President Steve Larsen. “They are building projects to accommodate the large users that Phoenix will always attract, but they’re making sure that these spaces can also be easily divided to serve those needing sub-50,000 square feet. Based on the trends we’re seeing, it’s a wise strategy.”

About JLL
JLL (NYSE: JLL) is a professional services and investment management firm offering specialized real estate services to clients seeking increased value by owning, occupying and investing in real estate. A Fortune 500 company with annual fee revenue of $5.2 billion and gross revenue of $6.0 billion, JLL has more than 230 corporate offices, operates in more than 80 countries and has a global workforce of more than 60,000. On behalf of its clients, the firm provides management and real estate outsourcing services for a property portfolio of 4.0 billion square feet, or 372 million square meters, and completed $138 billion in sales, acquisitions and finance transactions in 2015. Its investment management business, LaSalle Investment Management, has $56.4 billion of real estate assets under management. JLL is the brand name, and a registered trademark, of Jones Lang LaSalle Incorporated.

In Phoenix, JLL is a market leader employing more than 540 of the region’s most recognized industry experts offering office, industrial and retail brokerage, tenant representation, facility and investment management, capital markets, multifamily investments and development services. In 2015, the Phoenix team completed 17.2 million square feet in lease and sale transactions valued at $930 million, directed $125 million in project management and currently manages a 16.4 million-square-foot portfolio. For more news, videos and research resources on Jones Lang LaSalle, please visit www.jll.com or www.jll.com/phoenix.