JLL Income Property Trust has received $49 million in financing for Southeast Phoenix Distribution Center, a four-building, 474,000-square-foot distribution center located in Phoenix’s Chandler submarket.
Public records show Metropolitan Life Insurance Co. provided the seven-year loan at a fixed interest rate of 2.7 percent.
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Allan Swaringen, President & CEO of JLL Income Property Trust, said in a prepared statement that this financing deal closed at an opportune time, given the current low interest rate environment combined with the property’s strong weighted average lease term of more than eight years. The REIT had acquired the Class A asset in February for $91 million from Conor Commercial Real Estate and WHI Real Estate Partners, in an all-cash transaction.
Southeast Phoenix Distribution Center occupies nearly 54 acres near the intersection of Interstate 10 and Loop 202 freeway, representing Phase I of the 774,000-square-foot Lotus Project developed by Conor Commercial. The buildings at 6511, 6565, 6615 and 6677 W. Frye Road came online in 2019, featuring 32-foot clear heights, grade and dock-high doors and a 210-foot shared truck court.
With CBRE in charge of leasing, the property was 96 percent occupied at the time of closing, according to JLL IPT’s website. One of the tenants is Isola Group, which signed a full-building lease at 6565 W. Frye Road in 2019.
The distribution center is 17 miles southwest of downtown Phoenix and 12 miles from Sky Harbor International Airport, in Phoenix’s Southeast submarket. The property is also 9 miles from Intel’s Ocotillo campus, slated for a $20 billion investment.
A strong submarket
Recent Colliers research shows that the Southeast Valley had an inventory of 90.7 million square feet of industrial space in the first quarter of 2021, with 54.1 million square feet dedicated to warehousing and distribution.
The submarket also had 2.2 million square feet of warehouse-distribution space under construction as of the first quarter. More than 525,000 square feet was underway in Chandler, according to CommercialEdge data. The largest property to be added to the pipeline is a 144,321-square-foot development part of Lotus Project Phase II. The project is slated for a full completion in the fourth quarter of 2021.