Orange County’s roster of industrial developers are going big on the property type in and around Phoenix.
Newport Beach-based CT Realty is one such example. The company recently submitted plans for a 2.6 million-square-foot industrial and data park center in Phoenix, within the city’s historic Turf Paradise horse racetrack.
It’s part of a growing development pipeline for the firm, which had north of $3 billion in projects underway as of last year. All of its current development activity is outside of Orange County, though it owns some local sites that could hold new projects in the future.
Other local firms with notable Arizona projects underway include Newport Beach-based CapRock Partners.
Phoenix “continues to advance as a critical logistics hub in the West,” according to Bob O’Neill, senior vice president of acquisitions at CapRock Partners.
CT Realty’s proposed project, called Winner’s Circle Business Park, includes eight speculative industrial buildings and two data centers.
The company will need to rezone about 30 acres for the project, which is scheduled to go before the city’s planning commission next month.
CapRock recently signed on its first tenant for CapRock West 202 Logistics, the largest industrial development on record for the city. It will ultimately span 3.4 million square feet on 183 acres.
It wrapped the first, 2.5 million-square-foot phase of the campus in July, around the same time it inked a deal with Colson Group USA for 118,833 square feet.
The second phase will include roughly 827,000 square feet across three buildings, with a delivery timeline not yet determined.
Phoenix vs. OC
Phoenix’s industrial vacancy rate rose 10 basis points to 3.4% during the second quarter, according to a market report from CBRE, as the region’s supply starts to surpass the rate of absorption.
Nearly 3.4 million square feet of industrial product in that market was delivered during the second quarter, according to JLL.
Orange County’s vacancy rate, meanwhile, has been on the rise since hitting historic lows last year, with last quarter’s rate up slightly to 2.1%, according to JLL.
The county last quarter recorded its first negative net absorption since 2021, though a limited development pipeline is expected to maintain the region’s low vacancy.
Turmoil in the nation’s capital markets has troubled the industrial development pipeline, according to Rockefeller Group executive Brett Anderson.
The Irvine-based firm has found opportunity in the Inland Empire, where the company paid $13.4 million for a 14-acre parcel to develop a 259,000-square-foot distribution center.
The project, dubbed Patterson Commerce Center, will be located next to a 1.4 million- square-foot logistics center that Rockefeller completed and sold in 2018.
“Tenant demand for quality Class A industrial buildings in the Inland Empire East remains strong for right-sized buildings,” Anderson, vice president for Rockefeller Group’s West Region, said.