CapRock Partners has begun development of CapRock West 202 Logistics, a 3.4 million-square-foot complex that marks the largest speculative industrial real estate project ever to get off the ground in Phoenix. The total estimated construction cost for the Class A complex is approximately $200 million, according to a source familiar with the master-planned development.
West 202 Logistics will occupy a 183-acre infill site along a key logistic transportation corridor near downtown Phoenix. The complex, which will occupy the site under a long-term land lease agreement orchestrated by Don MacWilliam and Payson MacWilliam of Colliers International, will take shape in phases and ultimately feature eight facilities. Phase I will consist of five buildings encompassing an aggregate 2.5 million square feet.
CapRock’s utter confidence in West 202 Logistics is unshaken by suggestions that the biggest spec industrial development in Phoenix history may potentially be too big.
“The demand for more industrial real estate space in the Valley is supported by the continued remarkable growth in population and employment,” Bob O’Neill, senior vice president of acquisitions with CapRock Partners, told Commercial Property Executive. “With a lot of big box industrial development activity occurring in the West Valley, CapRock is pleased to be bringing a highly efficient and accessible new state-of-the-art development to Central Phoenix where future tenants of CapRock West 202 Logistics will be within a 30- to 45-minute drive to most areas within the metropolitan statistical area.”
The proof is in the numbers
Metropolitan Phoenix’s industrial market is firing on all cylinders. In the second quarter of 2021, the market recorded its lowest vacancy rate on record, 5.9 percent, even as product under construction reached an all-time high of 19.2 million square feet, according to a report by Colliers.
Additionally, the market posted 5.8 million square feet of positive net absorption during the second quarter, marking the ninth consecutive quarter of absorption exceeding 1 million square feet. And the long-term outlook for the market is strong. As noted in the Colliers report, “Phoenix has now broken into the tier 1 marketplace, which results in stronger attention and demand from investors and new-to-market businesses.”
CapRock’s endeavors extend well beyond its gargantuan commitment at West 202 Logistics. “CapRock Partners remains bullish on the Phoenix industrial market as a preferred area for investment,” O’Neill added. “Our firm is actively acquiring value-add industrial assets and land opportunities in Phoenix and other key Southwest markets.”
CapRock is currently in escrow on five separate projects totaling nearly 900,000 square feet. The private industrial real estate investment and development firm certainly has the resources to support a variety of pursuits. Earlier this year, CapRock completed the final close of its oversubscribed CapRock Partners Industrial Value-Add Fund III, resulting in $1 billion in leveraged buying power for the investment vehicle.
CapRock Partners expects to break ground on the CCA Architects-designed West 202 Logistics in November 2021. Phase I of the project is scheduled to deliver by the end of 2022.