In a $37.98 million deal, Lincoln Property Company (LPC) has completed the sale of a five-building Northwest Phoenix industrial portfolio to Colorado-based REIT Industrial Property Trust, Inc. The deal, which includes Lincoln Deer Valley and Lincoln Pinnacle Park assets, represents the powerful driving force of Phoenix’s mid-size industrial user.
“This is a perfect example of the success happening in Phoenix’s small- to mid-size industrial space,” said Lincoln Property Company’s Vice President Amr Ceran. “These buildings are 97 percent NNN leased with staggered expirations, and below-market rents that deliver a long runway of upside potential for the new owner. It is a great position to be in for both a buyer and a seller.”
LPC serves as property manager for both projects, and will continue do to so for the new owner. This continues a long-standing relationship between the companies that was established in 2013, when LPC sold Broadway 101 to a former entity of Industrial Property Trust for more than $77 million. LPC continues to manage the 11 building, 808,000-square-foot Broadway 101 industrial park as part of LPC’s 8 million-square-foot local property management portfolio.
The Lincoln Deer Valley project is located at 21420 and 21430 N. 15th Ln. in Phoenix, and Lincoln Pinnacle Park is located at 23040 N. 11th Ave. in Phoenix – on sites to the direct north and south of Phoenix Deer Valley Municipal Airport.
Together, the buildings total 340,646 square feet of state-of-the-art, Class A single and multi-tenant industrial space. They provide a range of suite sizes to meet the needs of a wide variety of users – a combination that has attracted 19 unique tenants including Petsmart, Alstom, Reynaer’s, US Air Conditioning Distribution and California Closets. Industrial neighbors include Honeywell and FedEx.
Constructed between 2005 and 2006, Lincoln Deer Valley and Lincoln Pinnacle Park offer 24- to 30-foot minimum clear heights, ample trailer storage and car parking. They are located approximately 2.5 miles from one another with direct access to I-17 and the Loop 101 freeway, and are minutes from the Phoenix Deer Valley Municipal Airport, one of the nation’s busiest general aviation airports. Tenants also benefit from Foreign Trade Zone status, providing state and local tax incentives and on-site job training programs.
Darla Longo, Barbara Emmons, Dan Calihan and Pat Feeney of CBRE represented LPC in the sale.
“Phoenix’s industrial market is flush with active, growth-minded companies who have pushed industrial vacancy rates to near single-digit status,” said LPC Director of Management Services Alisa Timm, who directs the company’s property management strategy. “Much of this activity is happening in the 5,000-square-foot to 50,000-suare-foot range – the precise type of tenants who occupy projects like Lincoln Deer Valley and Lincoln Pinnacle Park. This requires a broad understanding of property management, but it also creates very diverse opportunities for our team to shine.”
LPC purchased the five-building portfolio in 2011 from Cornerstone Real Estate Funds as part of a strategy to purchase and stabilize core, institutional-grade industrial space. Through an aggressive leasing plan, LPC – in partnership with Steve Sayre, Pat Harlan and Kyle Westfall of JLL – improved the project from 70 percent to nearly 100 percent occupied.
The sale of Lincoln Deer Valley and Lincoln Pinnacle Park caps off a record-breaking year for the Phoenix office of Lincoln Property Company, who since January 2015 has generated more than $271 million in metro Phoenix investment and development activity. This includes the company’s very recent, $44 million purchase of the historic Luhrs City Center in downtown Phoenix, the $58 million LPC-Oaktree Capital Management purchase of Biltmore Commerce Center in Phoenix, the $42.3 million disposition of Camelback Square in Scottsdale and the $65 million LPC-Goldman Sachs purchase of Promenade Corporate Center in Scottsdale. It also includes the development and delivery of the $24 million Waypoint Building One office property in Mesa.
LPC is actively marketing pre-lease and/or design-build opportunities for Waypoint Building Two, and in March was selected to develop the first phase of Class A and mixed-use office space for The Grand, a 60-acre, urban mixed-use property within Papago Park Center.