Amazon Inks 1.2 MSF Lease for New Phoenix Industrial Asset

Amazon has committed to a 10-year lease at a newly built 1.2 million-square-foot industrial facility at The Cubes at Glendale in Phoenix’ West Valley that Chicago-based developer CRG has listed for sale.

Amazon is expected to occupy Building B, located at 15301 W. Northern Ave., in Glendale, Ariz., as soon as possible, said Will Strong, executive vice chair and lead of the Mountain West region for Cushman & Wakefield’s National Industrial Advisory Group.

The Amazon deal is considered the largest known industrial lease deal in metro Phoenix since 2022, according to the Phoenix Business Journal.

“It’s a good sign for the market,” Strong told Commercial Property Executive.

The Cushman & Wakefield team, which includes Strong, Kirk Kuller, Michael Matchett, Molly Hunt and Dean Wiley, are marketing the building for sale as an exclusive advisor to CRG.

---

READ ALSO: Why Industrial Is Falling Back to Earth But Not Off a Cliff

---

A JLL team consisting of Bill Honsaker, John Lydon and Kelly Royle are the leasing brokers for The Cubes at Glendale. Mike Freret, a market leader for KBC Advisors in Phoenix, represented Amazon in the lease deal, the business journal reported.

Other tenants at the 335-acre industrial park include Williams Sonoma, US Merchants and Saddle Creek Logistics Services, which leased Building E, a 570,080-square-foot building in October. Fundrise acquired Building E, which had been completed in 2022, nearly a year ago from CRG for $82.6 million. Strong, Kuller, Hunt, along with Phil Haenel and Micki Strain, all from Cushman & Wakefield, represented CRG in the sale of Building E.

CRG and Phoenix-based Bird Dog Industrial broke ground on the master-planned industrial park in January 2021. It is being developed in phases over a five-year period with both speculative and build-to-suit assets and will have about 5.5 million square feet of industrial properties at build out.

In addition to Building E, CRG had previously sold off the 1.2 million-square-foot Building A to LaSalle Investment Management and the 637,000-square-foot Building D to US Merchants.

Building B details

CRG parent company Clayco received a nearly $111 million construction loan in September 2022 from Commerce Bank with a maturity date of September 2025, according to CommercialEdge data.

The cross-dock warehouse features a 40-foot clear height, 620-foot building depth, 213 dock-high doors and four grade level doors, as well as an ESFR fire sprinkler system and high-efficiency LED lighting. The 76.9-acre property also includes 416 trailer parking stalls and 694 auto parking stalls.

The site has easy access to Loop 303 and the Northern Parkway. The facility is 6.5 miles to Interstate 10 and 30 miles from Phoenix Sky Harbor International Airport. The location makes it easy for tenants to serve Arizona as well as key markets in the Western U.S. including San Francisco, Ports of Los Angeles and Long Beach in California, Utah, Nevada and New Mexico.

Industrial hotspot

The West Valley submarket in metro Phoenix has become an industrial hotspot in recent years due to a strong labor market, access to major markets, simplified tax system and low cost of doing business.

Strong told CPE the Phoenix metro benefits from challenges facing states like California, leading to a very active industrial market. He said development and transactions had not slowed down in the metro as it has in other markets because of the high interest rate environment.

“Phoenix is still ripping. It’s pretty wild. Phoenix continues to have the same growth trajectory,” he said.

Phoenix retained its position as the top industrial development market in 2023, according to newly released CommercialEdge data.

As of January, more than 42.6 million square feet of industrial space was under construction in the market, representing 11.2 percent of existing stock. Last year, about 32.5 million square feet of industrial space was delivered in the metro, encompassing 152 projects, or 8.6 percent of total stock, according to CommercialEdge data. In 2023, 106 properties broke ground within the Phoenix market, accounting for 6.2 percent of total stock—significantly higher than the U.S. average of 1.3 percent.