Phoenix light industrial park sells for $30.89M
JLL Capital Markets closed the sale of and arranged an acquisition loan for Koll Cotton Center
PHOENIX, March 19, 2021 – JLL Capital Markets announced today that it has closed the $30.89 million sale of and arranged a $23.2 million acquisition loan for Koll Cotton Center, a seven-building light industrial park totaling 225,403-square-feet in Phoenix, Arizona.
JLL marketed the property on behalf of the seller, BKM Capital Partners. TerraCap Management, LLC, a privately held investment firm based out of Naples, Florida, acquired the asset. Additionally, working on behalf of the new owner, JLL placed the five-year, floating-rate acquisition loan with a life insurance company.
Koll Cotton Center comprises seven buildings on 17.81 acres at 4050 E. Cotton Center Blvd. within the high-demand Cotton Center Busines Park, a 286-acre mixed-use development. This infill, central Phoenix location within the high-demand Airport Industrial submarket provides easy access to all major area throughfares, including Interstates 10 and 17, providing connectivity to the entire Southwest U.S. within a single day’s drive. Tenants at the property have access to more than 2.1 million customers within 15 miles of the property and nearly 4.9 million within 55 miles. Additionally, the property is proximate to Sky Harbor International Airport, downtown Phoenix and a BNSF intermodal facility.
Koll Cotton Center has been institutionally owned and maintained since it was constructed in 2000. Since 2015, the seller has implemented a multi-million-dollar improvement and enhancement plan that includes spec suite buildouts, new signage and interior and exterior improvements. The park buildings are 93 percent leased to 28 tenants and feature clear heights ranging from 16 to 18 feet, ample parking and office finish.
The JLL Capital Markets Investment Sales Advisory team representing the seller was led by Senior Managing Director Mark Detmer and Senior Director Ryan Sitov, along with local market experts Executive Vice President Steve Sayre and Managing Directors Mark Gustin and Dave Seeger.
The JLL Capital Markets Debt Placement team representing the new owner included Executive Managing Director Kevin MacKenzie and Director Jason Carlos.
With rising population, workforce and strong housing market, the demand for industrial space in the Phoenix MSA is growing. JLL Research detailed in its Phoenix Industrial Insight - Q4 2020 report that the Airport Industrial submarket – where Koll Cotton Center is located – has a vacancy of 6.4 percent, which is significantly lower than the 8.4 percent total vacancy for Phoenix Industrial market. Additionally, only 94,146 square feet of industrial space was under construction in the fourth quarter, increasing the demand for existing space.
JLL Capital Markets is a full-service global provider of capital solutions for real estate investors and occupiers. The firm's in-depth local market and global investor knowledge delivers the best-in-class solutions for clients — whether investment sales advisory, debt placement, equity placement or a recapitalization. The firm has more than 3,700 Capital Markets specialists worldwide with offices in nearly 50 countries.
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JLL (NYSE: JLL) is a leading professional services firm that specializes in real estate and investment management. JLL shapes the future of real estate for a better world by using the most advanced technology to create rewarding opportunities, amazing spaces and sustainable real estate solutions for our clients, our people and our communities. JLL is a Fortune 500 company with annual revenue of $16.6 billion, operations in over 80 countries and a global workforce of more than 91,000 as of December 31, 2020. JLL is the brand name, and a registered trademark, of Jones Lang LaSalle Incorporated. For further information, visit jll.com.
About BKM Capital Partners
BKM Capital Partners was founded in 2013 by Brian Malliet. Headquartered in Newport Beach, California, BKM Capital Partners is a real estate fund manager specializing in the acquisition and improvement of value-add light industrial multi-tenant properties in metro areas across the Western U.S. Combining a deep knowledge of this niche industrial product type with a vertically-integrated operator platform that includes in-house capabilities to reposition and convert existing assets, enhance property management, incorporate leasing management and institutionalize light industrial properties characterized by fragmented ownership positions. The firm continues to build on its proven track record, generating strong results with high levels of transparency and engagement for investors. Additional information is available at bkmcapitalpartners.com.
About TerraCap Management, LLC
TerraCap Management, LLC is a commercial real estate investment manager focused on value-add real estate acquisitions in the South Atlantic, West Central South and West Mountain regions of the United States. TerraCap considers thematic factors such as business formation, employment growth and population growth on a market-by-market basis, as most metros and submarkets have different economic-based industries and therefore move through their economic cycles differently. TerraCap makes moderate strategic overweighting or underweighting to markets, depending on the specific economic drivers influencing supply and demand. TerraCap intends to invest in assets so that no economic industry base will be allowed to dominate any property or the portfolio’s performance.