AECOM-Canyon Partners, IndiCap form warehouse JV in Arizona

August 20, 2022

IndiCap and AECOM-Canyon Partners recently teamed up on the acquisition of 113 acres of land in Mesa, Ariz., for the development of Eastmark Center of Industry, a 1.6 million-square-foot industrial development. The joint venture partners paid $48 million for the two parcels of land, located in the Eastmark master-planned community.

For IndiCap, Eastmark marks the year-old boutique industrial real estate company’s entrée into the metropolitan Phoenix market. AECOM-Canyon Partners, a partnership between AECOM Capital and Canyon Partners Real Estate, brings equity capital to the joint venture project, along with a proficiency in development. Together, IndiCap and AECOM-Canyon will transform the newly acquired land into a Class A industrial destination. The hardest part may very well be behind the joint venture, as securing land in the area is no simple feat.

“Developable land sites in Mesa are either developer controlled or not for sale,” Jason Moore, senior vice president with JLL, told Commercial Property Executive. Moore, along with JLL colleagues Pat Harlan and Steve Larsen, represented IndiCap in the site selection and land acquisition process. “We started the process with IndiCap almost a year ago,” Moore continued. “Their market timing along with patience to acquire the right site has set this project up for huge success.”

Located near Santan Loop 202 and Elliott Road within the Elliott Road Technology corridor, the Eastmark site allows for easy access to multiple thoroughfare entrances and sits within close proximity to Apple’s $2 billion global command center, Facebook’s $800 million data center project and Phoenix-Mesa Gateway Airport.

The Deutsch Architecture-designed project will encompass 10 buildings built to accommodate a variety of users, with sizes ranging from 83,200 square feet to 426,400 square feet. Additionally, the state-of-the-art facilities will feature 30- to 36-foot clear height and 160- to 500-foot building depth. Build-to-suit options may be available in future phases of the project. Layton Construction will serve as general contractor for the development.

Can’t build fast enough

Despite having posted a record-high construction pipeline of 38.5 million square feet in the first quarter of 2022, the metropolitan Phoenix industrial market continued to see its net absorption rise, increasing to 6.2 million square feet, according to a report by Kidder Matthews.

“The Phoenix industrial market’s record level performance in 2021 carried into the first quarter of 2022 and will continue to fire on all cylinders over the next year,” according to the Kidder Matthews report. “The recent demand for industrial space is unparalleled and the market will remain one of the top in the nation for last-mile and e-commerce users, data center operators and manufacturers.”

The industrial market in Mesa is particularly hungry, having recorded a vacancy rate of just 2.1 percent in the first quarter of the year. “It boils down to employment,” Moore said. “Market activity in Mesa is high for industrial users seeking access to highly qualified labor. A few of these industries include high-tech manufacturing, pharmaceuticals, electric vehicles and companies that are in and support the growth we are seeing in the semiconductor field.” IndiCap and AECOM-Canyon plan to break ground on Eastmark in the fourth quarter of 2022.