Developer’s Phoenix Debut Makes ‘Big Splash’ With Speedy Sale

Article originally posted on CoStar on March 31, 2023

Sale/Acquisition of the Year for Phoenix

Call it success, squared.

One of the first buildings at St. Louis-based CRG’s inaugural Phoenix project, a massive industrial park called The Cubes at Glendale, not only leased up quickly but sold almost as fast.

Over the course of 2022, the developer finished, and then flipped, Building D at The Cubes, a 637,040-square-foot industrial property at 7401 N. Reems Road in Glendale, a suburb west of Phoenix proper. The buyer in the June sale was the incoming tenant, US Merchants of Beverly Hills, California, which paid about $65.3 million for the property. The company, which operates in the U.S. and Canada, makes product packaging and retail displays and also offers transportation and logistics services. It intends to use the building as a new manufacturing and distribution hub. The plant will have a workforce of 600 to 700 people.

The sale of Building D is not the biggest industrial sale of 2022 for the Phoenix region or even The Cubes at Glendale. In September 2022, Chicago-based LaSalle Investment Management paid $135 million for Building A at The Cubes, a 1.2 million-square-foot building at 7723 N. Reems that was built in 2022 and is wholly leased to the home goods retailer Williams Sonoma. By dollar amount, the sale of Building A was the second biggest industrial transaction in the region for the year.

Nevertheless, the sale of Building D made an impression on the Impact Award judges, a panel of local real estate experts who said the deal was significant because of its execution and its meaning for both CRG and the Phoenix region at large. More than one judge pointed to the number of jobs that would be created by US Merchants as a boon to Phoenix, and a sign that Phoenix’ star is still rising, even as the industrial market cools.

The deal “put Arizona on the map” said judge Rory Carder, a principal and co-studio director at the Phoenix office of the international design firm, Gensler.

Others were impressed by the what the sale portends for CRG.

“For a new developer to the Phoenix market, [it’s] a big splash,” said Jeff Foster, mega-developer Prologis’ vice president and market officer for Phoenix, Tucson and Albuquerque, New Mexico.

About the property: Building D is a 637,000-square-foot building at 7401 N. Reems Road in Glendale. It is part of The Cubes at Glendale, an industrial development that would include five buildings and 5.5 million square feet of new space if all goes according to plan. The developer is CRG, a company based in Clayton, Missouri, that serves as the development arm of Chicago-based Clayco.

What the judges said: “The Cubes at Glendale is the most impactful because the industrial project will bring hundreds of new jobs and spark the need for more infrastructure to support the future jobs,” Carder said.

They made it happen: The seller was represented by Bill Honsaker, John Lydon and Kelly Royl of JLL’s Phoenix office. The buyer was represented by Joey Sugar of CBRE’s Ontario, California office.