BROADWOOD BUSINESS PARK
Broadwood Business Park is a 11-building, 156,129 sf multi-tenant industrial center located in the Phoenix / Mesa, AZ submarket with close proximity to AZ-101, AZ-202, and US-60. The property is currently 97% leased with various amenities within close driving distance.
14' - 16' Ceiling Heights
Grade Level Loading
2.02/1,000 SF Parking Ratio
BROADWOOD BUSINESS PARK
PHOENIX INDUSTRIAL MARKET
Strong population and job growth in the Valley of the Sun are bolstering a rapidly growing consumer base in the region and generating industrial demand. Approximately 35 million consumers can be reached within a single day’s truck ride from metro Phoenix, fueling demand for industrial space among companies in the e-commerce, logistics, and construction industries. Phoenix has also become one of the most active data center markets in the country, not only because of the vast consumer base but also due to Arizona's tax incentive for data center development, a robust and growing power grid, and limited occurrence of natural disasters. With relatively few barriers to development, a flourishing local economy, and favorable demographics, new industrial supply has consistently poured into the market. New development is primarily tailored to the logistics segment, which accounts for the bulk of completions. Even with elevated levels of construction, strong demand has maintained a vacancy rate well below the market's historical average.
Many companies established industrial operations in Phoenix because of the low cost of doing business and proximity to major regional markets, particularly in California. The average industrial rent in Phoenix is nearly 5% below the national average, and the discount is considerably higher compared to rents in key California metros. Rent growth has trailed the national average in past years, but Phoenix is now generating above-average rent gains as the rest of the U.S. regresses. Investors have become increasingly active in the local industrial market. Sales volume reached a record-high of $3.0 billion in 2019. Heightened buyer competition put continued upward pressure on pricing. Institutional investors scoured the market for well-located and quality assets in West Valley industrial hubs, which bolstered transaction volume last year.
Mesa industrial fundamentals have strengthened throughout the expansion, thanks to limited new supply and steady demand. Consistent demand has compressed vacancies from a recessionary high of 20.3% to 3.5%, well below the submarket's historical average. Local businesses drive demand in the booming East Valley region. Most industrial product is situated along Broadway Road with easy access to Loop 101, Loop 202, and the Superstition Freeway. Some of the most prominent tenants include Crescent Crown Distributing, Dexcom, and Mesa Cold Storage. The construction pipeline is minimal, which is likely to continue as the submarket approaches full build-out. Plus, developers are expected to stay focused on the West Valley region, where plenty of land is available to build massive logistics facilities for national and regional tenants.
Mesa typically commands rents slightly higher than the metro average at about $9.00 /SF. Like the rest of the Valley, annual rent growth has been robust in recent quarters but is slowing. Investment activity tends to fluctuate year to year, as do cap rates, depending on the mix of assets sold. Given the lack of institutional product in the submarket, most trades involve local investors that are often owner/users.