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Mega-Portfolio Hits the Industrial Sale Column

PHOENIX—With growing demand, the market continues to record increased competition, such as the large industrial portfolio that recently sold for $66 million to Exeter Property Group.

By Lisa Brown | lisabrown | | Updated on May 19, 2016
Riverside Business Center Riverside Business Center has abundant cross-dock distribution space.
PHOENIX—The Phoenix industrial real estate market started 2016 with nearly 1.9 million square feet of net absorption, despite vacancy and rental rates remaining steady. Market-wide direct vacancy rates retained the rate of 10.3%, a result of considerable leasing activity in the past quarter balancing out more than 2 million square feet of construction deliveries. With growing demand, the market continues to tighten, and increased competition for space is expected. Resulting higher rates should continue in 2016, says Kidder Mathews . Continuing the theme established in the first quarter reflecting increased activity, a significant amount of industrial space was recently sold. While a large portfolio of industrial space located in one of the country’s fastest growing metro areas is bound to attract significant investor attention, this one is of historic makings. The three-property Phoenix Metro portfolio sold for $66 million to Exeter Property Group from seller, Duke Realty Corporation . Managing directors, Bo Mills and Mark Detmer , led the JLL capital markets team on behalf of the seller. “Phoenix’s industrial market is increasingly on investors’ radar due to its connectivity and favorable yields compared to tier-one markets,” said Mills. “This portfolio represented an incredible opportunity to acquire a critical mass of institutional-quality warehouse product in a business-friendly market.” The three properties total 937,655 square feet and are leased to six diverse tenants: • Riverside Business Center totaling 603,909 square feet of cross-dock distribution space • Estrella Buckeye totaling 250,157 square feet of distribution space • 2021 S 51st Avenue, a truck terminal totaling 83,589 square feet Detmer tells GlobeSt.com: “Investors from across the globe are placing money in US industrial space. They are drawn to the relative stability of the product and its proven ability to provide a great yield. We don’t see this demand going away.”  

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