New York Investment Firm Buys Six-Building Industrial Park in Phoenix’s Mesa Suburb

Article originally posted on CoStar on June 20, 2022

Pecos Commerce Center Trades for 14 Times Its Last Selling Price More Than 10 Years Ago

The Pecos Commerce Center in Mesa, Arizona, is fully leased to 43 tenants. (CoStar)
The Pecos Commerce Center in Mesa, Arizona, is fully leased to 43 tenants. (CoStar)

Global alternative investment management firm Investcorp has acquired the Pecos Commerce Center, a light-industrial campus in the Phoenix suburb of Mesa that is fully leased to dozens of light manufacturing, distribution, retail and services businesses.

New York City-based Investcorp paid $60.3 million, nearly 14 times the property’s last selling price in 2010, to buy the six buildings at 7931 E. Pecos Road from Scottsdale-based Wilson Property Services, according to public deed and loan documents.

Industrial property investment volume and average per-square-foot prices have shattered records for each of the past two years in Phoenix, which logged sales of $5.5 billion in 2021, eclipsing the prior all-time record of $2.9 billion set the year before by 90%. Average prices of logistics buildings have nearly doubled from $94 per square foot in late 2020 to a projected $175 a foot in the second quarter, according to CoStar Market Analytics.

Out-of-state and international investors bullish on the area’s population and business growth are paying premium prices as they scour the market for nearly every available type of warehouse and light manufacturing building. In September, BentallGreenOak, a global real estate investment management adviser based in Toronto, paid $150 per square foot, or $186 million, for a 1.3 million-square-foot logistics building near the Loop 303 freeway from its developer, Lincoln Property Co.

JLL Capital Markets arranged a $40.2 million floating-rate loan for Investcorp to buy the industrial park built in 2008 that totals almost 222,500 square feet. In keeping with rising industrial prices across Phoenix, the $271-per-square-foot sale price for Pecos was nearly 45% higher than the average paid for industrial properties in the Chandler North and Gilbert markets over the past 12 months, according to the latest CoStar Market Analyticsdata.

The 18-acre commerce center has 43 tenants, including small manufacturers, construction companies and wholesale and retail businesses, according to CoStar data.

The business park is near the Loop 202 freeway and about 2 miles from Phoenix Gateway-Mesa Airport in a southeast corner of the valley that has a slightly lower vacancy rate than the broader Phoenix industrial market’s rate of 4.3%, according to CoStar.

For the Record

The JLL Capital Markets team that represented Investcorp included Executive Managing Director Michael Tepedino, Senior Managing Director Michael Gigliotti, Director Jason Carlos and analyst Jarrod Howard.