A San Diego developer has plans to double the size of an industrial campus across an additional 80 acres it recently acquired in north Phoenix, representing an overall investment of about $260 million.
Sunbelt Investment Holdings Inc., also called SIHI, is planning to build a 16-building industrial park called Deer Valley Business Campus totaling more than 1.6 million square feet in multiple phases.
The industrial park is situated on two adjacent properties on the west and east side of 7th Avenue along Rose Garden Lane just south of the Phoenix Deer Valley Airport. SIHI won an initial 80 acres in a state land auction a couple of years ago and recently won another land auction for the additional 80 acres for $23.7 million.
Todd Holzer, president of SIHI, said construction recently started on the west side of 7th Avenue on three buildings totaling 240,000 square feet for its first phase. The second phase will comprise two buildings that are about 105,000 square feet each, while the third phase is expected to be announced at a later date.
For the property on the east side of 7th Avenue, Holzer said they could develop a build-to-suit facility for a manufacturing or distribution-related company or continue with plans to develop a speculative industrial park that’s similar to the west site. The east property will start construction after the first site is completed, Holzer said.
Luke Krison and Mark Krison of CBRE Group Inc. are the leasing brokers for the industrial park. Willmeng Construction is the general contractor and Balmer Architectural Group is the architect for the two properties.
SIHI, which owns about 2,800 acres across the Valley, said it owns a lot of land in cities such as Phoenix, Mesa, Buckeye and Goodyear.
Before news of the Taiwan Semiconductor Manufacturing Co. plant drove a surge of vendors and suppliers to the Deer Valley market in recent years, Holzer said they wanted to build in the Deer Valley market due to spacing and to have a location in north Phoenix.
“We doubled down and bought the other side, just because we’re always looking to buy land, and secondly, the Deer Valley market continues to be a tight market,” Holzer said. “Some of that is being gobbled up by vendors and suppliers to the Taiwanese deal, but even if that wasn’t there, if Taiwanese never came to Phoenix, we believe in that market pretty well.”
In addition, Holzer said the site is conveniently located near the Loop 101 and Interstate 17.
“From a trucking point of view, from a getting employees to commute to a location, it’s hard to go wrong there,” he added.
In addition to the 160 acres near the airport, SIHI is also continuing to build on a 90-acre site that’s also located in the Deer Valley area at the southwest corner of Bell Road and 19th Avenue.
The project is called Bell 17 Business Park and has so far secured leases for its first industrial building with California Closets and a custom packaging company, Holzer said.
“With the success of that building, we’re going to start going into design for more flex, industrial and general purpose industrial at the 19th Avenue site,” he said.
At full build-out, the Bell 17 Business Park could total about 1 million square feet of space across multiple industrial, flex and office buildings, according to marketing materials for the project.
The Deer Valley submarket currently has nearly 2 million square feet of industrial space under construction and a 4.5% direct vacancy rate, which is higher than the overall 4.2% vacancy rate in the Phoenix metro, according to data from Cushman & Wakefield’s Q3 industrial report.
Also in Phoenix, SIHI recently sold about 51 acres to Stack Infrastructure, which plans to build a 234-megawatt data center campus near 40th Street and Loop 202 near the Phoenix Sky Harbor International Airport.
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