Merit Partners-Led JV Buys 611 Acres in Metro Phoenix to Develop $1.5B Industrial Park
GLENDALE, ARIZ. — Merit Partners is leading a joint venture to develop Camelback 303, a $1.5 billion industrial park in the northwest Phoenix suburb of Glendale. The Phoenix-based firm recently closed on the acquisition of 611 acres along the Loop 303 corridor for the project, which will total 9 million to 10 million square feet of logistics and manufacturing space upon completion.
Merit’s joint venture partners include industrial REIT First Industrial Realty Trust Inc. (NYSE: FR) and equity partner Diamond Realty Investments, which is the real estate investment arm of Mitsubishi Corp.
According to second-quarter 2020 research from JLL, industrial asking rents in metro Phoenix are up 1.8 percent and absorption has increased 39 percent from this time last year. The second quarter marks the 28th straight quarter of positive absorption for the market.
“We are extremely excited to be building at this location and at a point in the cycle where demand for Class A industrial is exponential — and expected to continue to rise in the years ahead,” says Kevin Czerwinski, president of Merit Partners.
Camelback 303 will sit along the west side of Loop 303 and feature freeway frontage between the Camelback Road and Bethany Home Road interchanges. The development will have multiple access points along Camelback Road, Cotton Lane and Bethany Home Road. The site is located about 2.5 miles from the newly built Northern Parkway, which is a four-lane reliever expressway for Interstate 10, as well as 30 miles west of Phoenix Sky Harbor International Airport.
The site has the most freeway frontage for any industrial development in Arizona, according to JLL, which brokered the land sale. Anthony Lydon, Marc Hertzberg and Riley Gilbert of the firm’s Phoenix office handled the transaction.
JLL projects that the Loop 303 corridor will grow from a 15 million-square-foot industrial submarket in Phoenix to more than 50 million square feet of industrial space within the next five to six years. Nearby corporate employers using industrial space include UPS, XPO/Boeing, Ferrero, Ball Manufacturing, Sub-Zero and REI.
“Camelback 303 is the natural extension of the market success we’ve already experienced at our adjacent industrial park, PV 303,” says Czerwinski. “Camelback 303 allows us to continue that momentum.”
The joint venture ownership will offer build-to-suit opportunities and speculative development at Camelback 303. No construction timeline or Phase I details were disclosed.
Since 2010, Merit Partners has overseen the ground-up development of more than $1 billion of industrial product in the metro Phoenix area comprising more than 10 million square feet.
First Industrial Realty Trust has approximately 64 million square feet of industrial space under ownership or development as of June 30. The Chicago-based REIT’s stock price closed at $42.78 per share on Monday, Aug. 17, up from $38.84 a year ago.
Diamond Realty Investments is an investment and development firm specializing in joint-venture partnerships in the industrial, multifamily, student housing, seniors housing and medical office sectors. The company has invested in more than 200 commercial real estate properties with a total acquisition and development cost surpassing $7.8 billion. The firm has offices in Los Angeles and Irving, Texas.
— John Nelson