Developer sells Phoenix spec distribution center for $43.5M

By Jan Buchholz
The Business Journal of Phoenix
Jan 28, 2008

Panattoni Development Group, a Sacramento, Calif.-based firm with a growing presence in the Phoenix metro area, has sold a large speculative distribution center in southwest Phoenix for $43.5 million. The sale closed on Thursday.

The sale to ING Clarion was especially gratifying given that the Durango Commerce Center, a 695,000-square-foot, two-building complex at 2155 and 2255 S. 75th Ave., is vacant.

"They're a very experienced buyer. We were vey confident they had the wherewithal to close," said Jason Quintel, senior vice president and project principal for Panattoni.

ING Clarion is a New York-based real estate investment conglomerate. According to its Web site, the company invests in high-quality real estate projects in a variety of product types in major metropolitan areas.

Quintel said Panattoni is fortunate to sell such a large speculative product in a slowing commercial real estate market. But industrial projects in the Valley continue to have appeal, he said, and those in the right locations will attract capital even without tenants.

"It's definitely a phenomenon that's happened over the last two years. Institutional players have money to buy finished product," Quintel said.

Panattoni began marketing the Durango Commerce Center in the second quarter of 2007, long before its completion earlier this month. Between 10 and 15 offers were tendered by local and national companies, but ING Clarion won out.

Bo Mills and Mark Detmer of Cushman & Wakefield of Arizona Inc. brokered the transaction.

"This is the premier distribution center in Phoenix," Mills said in a news release. "The sale of this vacant building shows the insatiable appetite for quality industrial space in Phoenix."

Panattoni, which has other industrial and flex space under construction in Goodyear and Chandler, intends to secure a building permit from the city of Phoenix for a 240,000-square-foot distribution center to be built at the southeast corner of 83rd Avenue and Buckeye Road.

The also company recently paid $3.5 million for a 10.5-acre parcel near the Glendale Municipal Airport, at the northeast corner of Glen Harbor Boulevard and Northview Avenue in Glendale. Panattoni will build Northview Commerce Center there, a three-building, 155,000-square-foot industrial project. Groundbreaking is expected this summer or fall.

"It's one of the few remaining industrial parcels around Loop 101 that can be developed quickly," Quintel said.