Panattoni will soon expand its industrial-sector presence to the booming metropolitan Phoenix market with a speculative project. A real estate fund advised by the commercial real estate company will develop Surprise Point, a premier 274,000-square-foot distribution facility in Surprise, Ariz.
Surprise Point will occupy an approximately 16-acre site roughly 20 miles northwest of downtown Phoenix in the West Valley area’s 290-acre Surprise Pointe mixed-use business park. Panattoni closed on the purchase of the fully entitled property in January 2023, acquiring it from Atlas Capital Partners in an $8.5 million transaction orchestrated by Cushman & Wakefield on behalf of the seller.
Irvine, Calif.-based Panattoni, which boasts an international footprint, has picked an optimal time to turn its attention to the Phoenix industrial market. “In metro Phoenix in 2022, we finished the year with positive net absorption of almost 22 million square feet. It was a big year for Phoenix,” Kirk Kuller, senior director with Cushman & Wakefield, told Commercial Property Executive. “And the demand drivers in Phoenix continue to be really strong.” Kuller worked on the land transaction with Cushman & Wakefield colleagues Will Strong, executive vice chairman; Phil Haenel, executive managing director; Molly Hunt, associate; Callahan Conway, senior financial analyst; and Stephanie Saccente, senior marketing lead.
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The vision for Surprise Point includes all the bells and whistles that industrial property users have come to expect in a state-of-the-art asset. The rear-load distribution facility will feature a clear height of 36 feet, 200-foot truck courts, 60-foot speed bays and ESFRs sprinklers. Additionally, the property will have the potential for rail service through BNSF Railway.
Right location in the right location
The Phoenix industrial market is faring very well, and as for Surprise, the city has been moving higher up on the radar, as evidenced by the submarket’s 1.7 percent vacancy rate in the fourth quarter of 2022, according to a report by Cresa. According to Cushman & Wakefield, Surprise’s success can be attributed to the two leading demand drivers for industrial product in Phoenix, the first of which involves the Golden State and the second has a little something to do with a semiconductor giant.
“[There] is the California impact, with users, distributors and manufacturers looking to relocate out of California and into Phoenix. Many of these users have landed in the West Valley and we have seen continued expansion along the Loop 303 Corridor,” Kuller said. “And then coming from the Deer Valley submarket, the TSMC impact has created a ripple effect of demand not only in North Phoenix but also moving south along Loop 303. The Surprise submarket ends up being a middle ground for many of these users.”
Panattoni expects construction of Surprise Point to get underway during the first quarter of 2023. In the meantime, the company remains active in other industrial endeavors. At the beginning of the new year, Panattoni revealed that it will break ground on Covington 18, a 243,000-square-foot warehouse in the suburban Seattle city of Covington, Wash., in April. And earlier this month, the company announced plans to develop the 1 million-square-foot Yuma Industrial Park in the border town of Yuma, Ariz., just 30 miles from the San Luis Port of Entry to Mexico.
The post Panattoni Plans Phoenix-Area Distribution Facility appeared first on Commercial Property Executive.
Development, Industrial, News, Phoenix, West, Atlas Capital Group, Cresa, Cushman & Wakefield, Panattoni Development Company
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