CapRock Partners, a Newport Beach, California-based industrial real estate development and investment firm that has been increasingly active in the Phoenix market for the past five years plans to begin construction in November on the largest speculative industrial park within the city of Phoenix.
The park, named CapRock West 202 Logistics, is planned for a 183-acre site at 59th Avenue and Van Buren Street and will total 3.4 million square feet of space in eight buildings at full buildout. The eight buildings will range in size from 228,000 to 1.065 million square feet.
“Phoenix had a lot going for it two or three years ago, like a good business climate, friendly government and growing population, and all of those attributes have been amplified since the pandemic,” Bob O’Neill, senior vice president of acquisitions for CapRock said. “It made us even more interested in expanding our portfolio in Phoenix.”
O’Neill said the firm had been eyeing the site for years and working on a plan to develop it. The project will be built on land that was leased from a private investor.
“We started looking at it in early 2018, you can see it from the freeway, so we would always ask what was going on with that property,” he said.
The firm opened two investment vehicles in 2020, including the one that will fund the construction of $1.5 billion worth of industrial real estate, including the CapRock West 202 Logistics.
Construction on the first phase, totaling 2.5 million square feet in five buildings, will begin in November and is expected to be completed by the end of 2022.
A different location
O’Neill said most of the Valley’s large-scale industrial projects are more than 20 miles west of the site, near the Loop 303 corridor, making the Phoenix site a desirable location with easy access to all areas of the Valley.
“This is an opportunity to deliver a large amount of new industrial space in a very infill area,” he said. The company expects a mix of logistics and manufacturing users to be located at the site. CapRock is just beginning to market the site to potential users, but he said there has already been interest from potential tenants.
“Every investment we have made in Phoenix has exceeded our expectations,” O’Neill said. The company bought its first building in Phoenix in 2017, and has since grown its portfolio in Phoenix to about 7.5 million square feet. In total, the company owns about 16 million square feet in Arizona, Nevada, California and Utah.
Don MacWilliam and Payson MacWilliam of Colliers International represented CapRock Partners in the CapRock West 202 Logistics land lease and will oversee the project’s leasing. CCA Architects and civil engineer Kimley Horn are also members of the project’s team.
O’Neill said the company is still very bullish on Phoenix and has several other acquisitions in the pipeline.
Industrial real estate continues to fare better than any other type in Phoenix, only picking up steam during the Covid-19 pandemic. According to JLL research, about 18 million square feet of industrial space is under construction across the Valley.