Hines Inks 1.3 MSF Industrial Lease in Metro Phoenix

G303. Image courtesy of Colliers

MLILY, the retail brand of Healthcare Arizona LLC, a venture of China-based Healthcare Co. Ltd., has leased the entire G303, a 1,253,382-square-foot speculative industrial park developed by Hines in Glendale, Ariz. The mattress manufacturer plans to occupy the space for at least 10 years starting December. Colliers negotiated on behalf of the tenant, while JLL represented Hines.

The deal brings the company’s Valley footprint to nearly 2 million square feet. In August 2020, MLILY entered the Phoenix market by leasing 643,798 square feet at First Park @ PV|303 in Goodyear, Ariz., attracted to the metro’s pro-business mindset.

Yang Chen, managing director for the Asia Pacific division of Colliers said, in a prepared statement, that MLILY decided all products sold in the U.S. market should be produced domestically. This decision generated an urgent need for larger manufacturing capabilities in the area.

Yang Chen partnered with Payson MacWilliam, Don MacWilliam and Chris Reese of Colliers Arizona in representing Healthcare Arizona LLC. Bill Honsaker and John Lydon with JLL assisted Hines in the negotiations.

A modular development

Situated on 75 acres at 6605 N. Sarival Ave., along the Loop 303 corridor, G303 was initially planned as a two-building, two-phase development. Hines, together with funds managed by Oaktree Capital Management, acquired the development site in March 2020. According to CommercialEdge information, the developer financed the project’s construction with a $27 million loan from Comerica Bank.

General contractor Graycor delivered G303’s first phase, totaling 569,520 square feet of industrial space, during the first quarter of 2021. However, as the tenant opted for the park’s single-building configuration, 683,862 square feet of space will be added to the existing structure during Phase II.

Upon completion, the facility will feature a 40-foot clear height, 228 dock doors, four grade-level doors, ESFR fire sprinklers, 208 trailer stalls and more than 1,000 car parking spaces. Amenities will include a covered picnic area and athletic sports court.

The property is roughly 15 miles west of downtown Glendale in the Northwest Valley submarket, neighboring Luke Air Force Base and across from Park303, the 4.5 million-square-foot industrial park developed by Lincoln Property Co. The Cubes at Glendale, the 5.5 million-square-foot development of CRG and Bird Dog Industrial, is also nearby.

Phoenix, a magnet for manufacturers

Greater Phoenix had more than 23 million square feet of industrial space underway as of June, representing 8.8 percent of stock, according to a recent CommercialEdge report. This results in an inventory of more than 263 million square feet.

While a large portion of the industrial inventory consists in warehouse and distribution space, developers are becoming increasingly interested in delivering manufacturing facilities. Colliers research shows The Valley’s manufacturing space inventory added up to nearly 66.9 million square feet of space in the second quarter of 2021.

TSMC and Intel are two of the major manufacturers that have entered or expanded in The Valley during the last two years, but they are not the only ones; notable examples also include ElectraMeccanica, Brooklyn Bedding and APEL Extrusions. According to a Greater Phoenix Economic Council representative, 238 manufacturing operations have relocated or expanded in the metro during the last decade.