LaSalle Acquires Industrial Park in Tempe
The suburban Phoenix properties total more than 536,000 square feet
LaSalle Investment Management has acquired Tempe Commerce Park, a five-building industrial complex totaling 536,122 square feet in Tempe, Ariz. The acquisition was made on behalf of LaSalle Property Fund, the company’s U.S. core open-ended fund. An acquisition price was not disclosed.
Located at 7340-7360 South Kyrene Road and 7333-7343 South Hardy Drive, Tempe Commerce Park is in the Tempe industrial submarket. The site offers accessibility to several major transportation routes, including I-10 and US 60.
The property, which totals more than 36.7 acres, features 24-foot clear heights and dock-high as well as grade-level doors. The complex is 92 percent leased to eight tenants, including McKesson, Genuine Cable Group and Rivian.
LaSalle manages $88.2 billion of assets in private and public real estate equity and debt investments as of Q3 2024. The firm’s clients include public and private pension funds, insurance companies, governments, endowments, corporations and high-net-worth individuals worldwide.
READ ALSO: 2024 Industrial Net Lease Sales and Cap Rates
JLL represented the seller, a global investment manager and BKM Capital Partners, in the sale to LaSalle. The JLL effort was led by Senior Managing Director Mark Detmer, Senior Director Greer Oliver and Associate Connor Nebeker-Hay. The local market leasing efforts were handled by CBRE Senior Vice President Jackie Orcutt and First Vice President Jonathan Teeter.
BKM Capital Partners focuses on investing in small and mid-bay light industrial properties in the western United States. In December, the company undertook a $550 million recapitalization of a nine-property light industrial portfolio with Kayne Anderson Real Estate totaling more than 2.1 million square feet in the West.
Phoenix industrial supply overshoots demand
Greater Phoenix has been one of the U.S. industrial markets to see a post-pandemic boom in demand that outpaced supply, followed by a more recent ramping up of supply that has outpaced demand.
In 2019, new supply was ahead of net absorption, but by a relatively small amount, with both figures hovering around 5 million to 6 million square feet that year, according to JLL data.
By 2021, pandemic-era demand for online sales, deliveries and last-mile logistics spurred a spike to nearly 20 million square feet of net industrial absorption, with new supply that year only a bit more than half of that, JLL notes. By 2023, however, new supply shot ahead that year to more than 30 million square feet, or roughly three times the total net absorption. Thus, vacancies are up. Total vacancy is at 12.5 percent as of Q3 2024, reports JLL. However, the report further forecasts that development will soon taper off. The absorption of recently delivered space will thus lead to an anticipated peak in vacancy rates in 2025.
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