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News release

PHOENIX, AZ

JLL: New Construction Driving Phoenix Industrial Rents

Leases at Airport I-10 and Park Lucero illustrate local trend


PHOENIX, September 23, 2016 – The delivery of more than 2.8 million square feet of new industrial construction in Phoenix during the first half of 2016 has made an impact on the Valley, says the Phoenix office of JLL – in some cases pushing industrial rental rates by as much as 36 percent higher than their existing average. Customers looking for increased efficiencies are flocking to this new Class A space, which features amenities such as wide column spacing and clear heights of up to 36 feet.

This trend is actively playing out at Airport I-10, in the airport submarket, and Park Lucero, in the Southeast Valley, where JLL has completed a total of 18 new leases over the last 24 months. All together, these leases represent a total tenant commitment of more than 579,000 square feet.

At Airport I-10, the newest deals include:

• Western Windows, leasing 169,685 square feet for design/manufacturing of custom windows and doors.

• Mainfreight, leasing 21,054 square feet for freight forwarding services and global logistics management.

• Barlow Distribution, leasing 78,843 square feet for general distribution operations.

Other tenants at Airport I-10 include Anixter Inc., DHL Express, Mach 1, Pilot Air Freight and Scientific Games.

At Park Lucero, new leases include:

• Thermo Fisher, leasing 10,148 square feet for equipment testing and service activities.

• Mastec, leasing 20,582 square feet serving key warehouse and equipment storage requirements.

Other tenants at Park Lucero include Adept, Cyclone Cup, Divind Tech, HOA Playground, Kaman/Extex Engineered Product Inc., Norwood Furniture, Shawshank Ledz, Trane, Wudel, Inc.

JLL Executive Vice Presidents Pat Harlan and Steve Sayre, and Associate Kyle Westfall are the exclusive leasing brokers for Airport I-10. Harlan, Sayre and JLL Vice President Steve Larsen represent Park Lucero.

"Phoenix has enjoyed a strong and steady demand this year from tenants seeking modern and efficient industrial space," said Harlan. "They are hungry for new inventory, and as soon as new product is introduced, it is being actively pre-leased or leased. This is particularly true for space in the Airport and Southeast Valley submarkets."

According to JLL, the warehouse and distribution space delivered, or set to be delivered, in Phoenix in 2016 averages $0.55 per-square-foot on a NNN basis, representing a 12 percent increase over the existing market average of $0.49. New manufacturing space is even more expensive, averaging $0.68 per-square-foot, up 36 percent from the existing average of $0.50.

Because of their new construction and prime locations, the average asking rents for Airport I-10 and Park Lucero sit above the market average at $0.65 per-square-foot and $0.58 per-square-foot, respectively.

Located at the northwest corner of 24th Street and Riverview Road in Phoenix, Airport I-10 totals 923,728 square feet of Class A space on 58 acres, just minutes from Sky Harbor International Airport. Park Lucero is located along the South Loop 202 Freeway in Gilbert, Arizona. It totals 631,000 square feet in six Class A buildings.

"These projects offer the design and location amenities that every tenant today wants, and those tenants are willing to pay for the advantages of this new product," said Sayre.

More information on these and other local industrial trends are available in JLL's Q2 Phoenix Industrial Report.

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 280 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 $59.1 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.