The Boyer Co. to Start Work on First Project in Huge Mesa Business Park

Article originally posted on Phoenix Business Journal on February 21, 2024

While infrastructure and site work are underway in Mesa, construction on the first phase of a build-to-suit U.S. headquarters for Canadian company Xnrgy Climate Systems is just around the corner.

Matt Jensen, a partner at Utah-based The Boyer Co., said he expects to have the building permits for Xnrgy Climate Systems production facility project in hand by the second or third week of March. Breaking ground on Xnrgy’s new space will effectively kick off the buildout for the 273-acre Gateway East, a mixed-use business park in southeast Mesa that will feature large industrial users, hotels, restaurants and some retail.

Xnrgy, a Montreal-based company that manufactures climate systems for data centers, will move into a building with 250,000 square feet of production space and a 25,000-square-foot office.

The company confirmed plans to join Gateway East last June. Around that time, Mesa City Council approved a development agreement and the rezoning for the site, clearing the way for Gateway East to move forward.

The land on which Gateway East will be built is owned by the Phoenix-Mesa Gateway Airport Authority. Jensen said Boyer has kicked in around $15 million for the infrastructure improvements, which include extending Aviation Way north to a new road that will be called Technology Avenue.

Jensen said Boyer is in the process of putting in storm sewer, water lines and more. Wespac Construction is the general contractor of those improvements.

Once it breaks ground on Xnrgy, Jensen expects the project to take about a year for its buildout.

Xnrgy first expressed interest in an Arizona expansion in early 2022, zeroing in on Mesa or Chandler before ultimately choosing a 38-acre site south of the Apple Inc. (Nasdaq: AAPL) data center on Elliott Road. Those plans then pivoted toward Gateway East.

Xnrgy expects to employ 1,200 in Mesa

Jensen said Xnrgy’s facility will cost between $70 million to $75 million in total, split between Boyer and the company. Wespec will also be the general contractor for Xnrgy’s facility and the company has worked closely with architecture firm Gensler for the design of its space.

Xnrgy is already looking ahead to possibly developing an additional 750,000 square feet of manufacturing space at Gateway East. Besides data centers, Xnrgy explores new ways to cool and heat facilities in several industries. The company said it plans on using the Mesa facility to focus on research and development and to facilitate the rapid demand for its climate systems, according to previous reporting.

Upon completion of the full buildout, Xnrgy is expected to employ more than 1,200 people at the park.

As of Feb. 20, there aren’t any other industrial users committed to the development. Jensen previously said Gateway East will be developed in three phases, but on mainly a build-to-suit pace going north. Phase one will be built on 110 acres; phase two totals 100 acres; and phase three will be 63 acres, according to previous reporting on the project.

“There’s a tremendous amount of empty spec [space] out there right now in that East Mesa area. I don’t personally don’t foresee us doing a spec building, at least in the immediate future,” Jensen said.

Lee & Associates’ Chris McClurg, Ken McQueen and Bill Blake are marketing the industrial space to users for build-to-suit opportunities Phoenix Commercial Advisors has the listing for the retail side.

The southeast Valley, particularly around the 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.