While Phoenix has a growing industrial construction pipeline, the market's Southeast Valley is becoming the hub for logistics center development. The Goodyear, Litchfield Park, West Glendale and Southwest Phoenix submarkets in particular have captured the majority of construction activity for logistics facilities.
“The Southeast Valley, specifically in the Goodyear, Litchfield Park, West Glendale and Southwest Phoenix, has become an epicenter of the logistics wars with Amazon rolling out last mile delivery operations in Goodyear, to UPS's 1,500-job sorting facility at PV|303 to the newest entrant Microsoft,” Thomas Brophy, marketing director of Colliers International in Arizona, tells GlobeSt.com. “Microsoft, along with the Bill Gates-affiliated entity Belmont Partners, has purchased nearly 26,000 acres in the Southeast Valley.”
These three entities are by far driving the activity in the market, with major land purchases. “In late 2017, the Bill Gates affiliated-Belmont Partners, purchased 25,000 acres of land 45 minutes west of downtown Phoenix off I-10 near Tonopah to turn into a smart city. In early April 2019, Microsoft purchased 147 acres at Citrus and Indian School Road, which is about nine miles from the 279 acres Microsoft purchased in September 2018 by Goodyear Airport,” says Brophy. “The land near Goodyear Airport is currently under construction and will be five building technology park of which a portion, if not all, will be used for data center purposes.”
The presence of these three mega companies have, no surprise, attracted more construction activity with a handful of other developments, including Chewy.com's 819,000-square-foot distribution center; and Ball Corp., a 500,000-square-foot manufacturing facility that will bring 130 jobs.
In total, the greater Phoenix market has 7.8 million square feet of industrial product under construction, and the activity is focused in both of the Southwest and Southeast Valleys. With the upcoming extension of the Loop 202, which will connect the two valleys, the activity is expected to increase. “For the Southeast Valley, Intel leads the charge with it's $1.5 billion renovation of Fab-42 Semiconductor Facility which is expected to house 3,000+ engineers and be completed 2021,” says Brophy. “A little further south and into Pinal County—which is still part of the Phoenix MSA, you have Nikola Motors set to begin construction on its massive manufacturing plant set to produce hydrogen-powered Class eight trucks. Additionally, you have Waymo, a Google-affiliated autonomous car company, which started in Chandler and has been opening up new facilities, the latest one which is close to Downtown Phoenix.”
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Kelsi Maree Borland
