Developers wrap up first phase at sprawling five-building Mesa industrial park - Phoenix Business Journal
Industrial park will approach nearly 1 million square feet at full buildout. Las Vegas-based developer IndiCap has completed the first phase of construction at the Eastmark Center of Industry in Mesa, a five-building industrial park near major data campuses by Meta Platforms Inc. and Apple Inc. The park was broke ground in November 2022 with plans for 977,600 square feet of new product across the five buildings. While tenant interest and activity is strong, there have been no pre-leasing deals at the nearly 1 million-square-foot park so far. At full buildout, Eastmark would cover more than 1.6 million square feet across 10 buildings. The area around Phoenix-Mesa Gateway Airport is one of the hottest areas for industrial development and leasing.
Published : 4 weeks ago by Ron Davis in Business
A large industrial park in the southeast valley is getting ready for tenants.
Las Vegas-based developer IndiCap said that the Eastmark Center of Industry — a five-building Mesa industrial park near major data campuses by Meta Platforms Inc. and Apple Inc. — has completed the first phase of construction.
“The completion of this phase marks the beginning of a new era for the Mesa market, one where we expect to see unprecedented growth and success," said Todd Ostransky, senior vice president of regional development for IndiCap, in a statement.
IndiCap and project partner AECOM-Canyon Partners broke ground on the site in November 2022 with plans for 977,600 square feet of new product across the five buildings. Layton Construction and Deutsch Architecture Group are the project's general contractor and architect, respectively. Kimley-Horn is the civil engineer. IndiCap tasked JLL's Steve Larsen, Pat Harlan and Jason Moore to market Eastmark.
Larsen said that while tenant interest and activity is strong, there haven't been pre-leasing deals at the nearly 1 million-square-foot park to date. Buildings range in size from 83,200 square feet up to a 426,400-square-foot building.
"What we typically see is six to nine months, post completion of construction, is when truly we see the bulk of our activity. We've been spoiled with pre-leasing the past, anywhere from 20-40%, depending upon the year," Larsen said. "We believe there's going to be everything from multi-tenant scenarios to full-building scenarios. ... I would say the bulk of our activity that we're seeing right now, a lot of it is larger. We've got a couple of groups on our prospect list that are [350,000 square feet]-plus — one is a battery manufacturer, one is a [third-party logistics company] on behalf of the semiconductor industry."
The southeast valley, particularly around Phoenix-Mesa Gateway Airport, is one of the hottest areas for industrial development and leasing. In 2023, the southeast valley submarket saw 3.2 million square feet of positive net absorption while 4.3 million square feet of new inventory was delivered in the fourth quarter alone, according to a market report from CBRE Group Inc.
"Look around immediate proximity of where [Eastmark is] with all the large corporate users ... the Apples and the Metas. Google's got a project right down the street. You've got Niagara bottling across the way. So you've got a handful of very large operators that are up there and it kind of legitimized the area," Larsen said.
Earlier this year, IndiCap confirmed that the second phase of Eastmark would be delayed. Deutsch Architecture Group in February filed for a one-year extension with the city of Mesa on the approved site plan for the Eastmark Center of Industry. Ostransky told the Phoenix Business Journal at the time that IndiCap looks to start the second phase once leasing picks up on the first phase, with a target of Q2 2025.
"We don't have any strategy in place that is a set percentage or square footage [leased before starting the second phase,] but that is fairly typical of what we see on the market today," Larsen said. "And it's really trying to time and provide product when you're running low on your first phase."
At full buildout, Eastmark Center of Industry would span more than 1.6 million across 10 buildings.
IndiCap and AECOM-Canyon Partners paid $48 million to acquire more than 100 acres on the southeast corner of Signal Butte and Elliot roads in April 2022 from Brookfield Residential Properties, according to previous reporting. IndiCap has 10 projects and over 13 million square feet of industrial space in the development pipeline in Arizona.
Later this year, IndiCap will look to start early construction on The Ranch — a multi-phased project that's set to transform more than 300 acres on the southwest corner of Elliot and Power roads in Gilbert. The project will encompass industrial, retail and restaurants, multifamily and open space.