Third-party logistics company signs big lease in West Valley

The Phoenix metro had a 3% vacancy rate in the industrial market for the first quarter of this year.

Third-party logistics company signs big lease in West Valley

CJ Logistics, based in South Korea, has signed a lease on a new industrial facility within the Phoenix metro area.

According to SteelWave LLC, the developer of this facility in California, the global third-party logistic firm will occupy 331,683 sq. ft. at the Commerce URL 303, and use it to distribute products to a Fortune 100 Company.

Gregg Hall said, "We designed an ultra-modern class A industrial building, with clear heights of 40 feet, for a tenant such as CJ Logistics who will distribute well-known consumer goods throughout the Southwest."

Andy Markham, vice chairman at Cushman & Wakefield said that the company had considered several buildings, but this one was the best choice. He also stated that Commerce URL 303 received several letters of intent and offers before CJ Logistics secured the lease. Markham, Mike Haenel and Phil Haenel of Cushman & Wakefield, Brandon Borsheim Foster Bundy Kristin Swartz Katie Repine represented the landlord.

The company signed the lease less than two month after expressing initial interest in the building. This is indicative of a high demand for space. CJ Logistics in Illinois also signed the lease before the building was completed.

Hall stated that "in strong markets such as Phoenix and Los Angeles there is always competition but the demand for storage space has been insatiable to the point where these buildings are leased almost immediately after they arrive." It was one of the quickest, with a very rapid lease negotiation and signing.

CJ Logistics has not responded to our request for additional information regarding the lease.

Commerce Square footage for Lease

CJ Logistics is expected to begin leasing the space this summer. The first building will have about 330,000 sq ft left. Construction has yet to begin on the second Commerce building, which is expected total more than 500 000 square feet.

Commerce URL 303 will be 1.1 million square foot at full build out. It is located at the northeast corner between Camelback Road and Alsup Road at 5215 N. Alsup Road, in Glendale’s rapidly growing industrial core near Luke Air Force Base.

Hall stated that they are currently in talks with several tenants about occupying the remaining space of the first building. The certificate of occupancy is expected this month. He said Phoenix had benefited greatly from organic growth, with an increasing population, and the industrial demand from Southern California which continues to have less than 1% of vacancies.

Hall stated that "Phoenix is an obvious market for 3PL, warehouse and distribution companies."

SteelWave is currently working to expand further into the Valley. Their first Phoenix industrial project, Commerce URL 303, was completed in March of this year. Hall stated that the ease of doing businesses in Phoenix metro cities is what has driven their desire to build more products in the Valley.

Markham stated that the West Valley will continue to grow due to its easy access to the Loop 303, Interstate 10, and the Ports of Los Angeles.