HVAC Manufacturer Launches $300M Project

On April 16th, XNRGY Climate Systems ULC, a manufacturer specializing in energy-efficient HVAC products, will officially break ground on a 275,000-square-foot sustainable manufacturing facility in Mesa, Ariz.

The project is the initial phase of a four-phase expansion in metro Phoenix for XNRGY, which is headquartered in Saint-Hubert, Quebec, in metro Montreal. The company reports its total investment in this expansion is about $300 million. The end result will be a 1 million-square-foot sustainable manufacturing hub.

XNRGY’s customers include data centers, industrial and institutional buildings, life science facilities, health-care facilities, and lithium-ion battery plants.

The company’s development partner is The Boyer Co., of Salt Lake City, which also provided financing for this initial phase, and the facility was designed by Gensler. XNRGY was working at least as early as January 2022 to get this project rolling, according to a statement at that time from the Arizona Commerce Authority. 

The 38.4-acre site is at the intersection of East Elliot Road and South Signal Butte Road in the Elliot Tech Corridor, less than 9 miles from the Phoenix-Mesa Gateway Airport and around 40 miles east of downtown Phoenix. The location has easy access to Highways 202 and 60.

Could be hotter

The metro Phoenix industrial space market has seen a recent uptick in overall vacancy, to 10.6 percent, according to a first-quarter report from JLL. Fortunately, the construction pipeline is contracting, yet only about one-third of the space that’s underway is preleased.

Meanwhile, rent growth is slowing and concessions are rising, also according to JLL, which indicates that “vacancies may reach an inflection point during the first half of 2025 and then begin a period of gradual decline.”