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California industrial developer signs major leases, expanding Arizona footprint
After landing some major leases in the second quarter of 2021, Southern California-based industrial real estate owner and developer Majestic Realty Co. is continuing to grow its presence in the Phoenix market.
In the past two months, Majestic signed leases with tenants to three of its metro Phoenix properties, bringing each of the three to full capacity. In Tolleson, Majestic signed a 224,874-square-foot lease with Ashley Furniture, one of the largest leases of the second quarter, at the Majestic Tolleson Center. Aaron Hodgdon of Hodgdon Group Realty and Rick Robertson of Lee & Associates represented Ashley Furniture. Allen Lowe and Jeff Conrad of Lee & Associates represented Majestic Realty Co. in the lease deal.
In Phoenix, the company leased 74,204 square feet to Dedicated Delivery Professionals in a single-tenant net lease at Majestic Papago, near 48th and Roosevelt streets. The tenant, a third-party logistics firm, was represented by Jeff Hays with Commercial Properties Inc. Majestic Realty Co. was represented by Allen Lowe and Matt Hobiaca of Lee & Associates. In Mesa, Majestic leased 21,854 square feet to U-Haul at the Majestic Falcon Field development. Rick Collins and Steve Larsen of JLL represented Majestic Realty Co. in the lease.
Ashley Furniture signed a major lease in Tolleson in a building owned by Majestic Realty CO.
Majestic Realty Co.
Tom Simmons, vice president for Majestic, said the company has had a presence in the Valley since the 1980s, but really began to grow the footprint about four years ago.
“We started in Tempe with a three-building industrial project, and that got the ball rolling,” he said.
Majestic holds and manages all of the properties it develops, so most of the projects are designed to accommodate a variety of tenant needs.
The company also has two industrial projects under construction, one in west Phoenix and one in Mesa. The Majestic 55, which is located near the Loop 202 South Mountain Freeway and Lower Buckeye Road, will total 489,284 square feet, and will be completed in the fourth quarter of 2021. In Mesa, the Majestic 202, a two-building project near Loop 202 and Greenfield Road, will total 158,656 square feet. Those two buildings are also scheduled for completion that the end of the year and are already in lease negotiations that would take a significant amount of the space.
Majestic also is doing predevelopment work on two more sites, one in the West Valley along Loop 303 and another in the East Valley along Loop 101 near the borders of Mesa and Scottsdale. Each of those projects is expected to total about 1 million square feet.
“We are very bullish on Phoenix right now,” Simmons said.
Many of the tenants the company works with are realizing they can do business in Southern California while having an Arizona address. The attractiveness of Arizona from a business perspective, paired with the explosive growth of industrial real estate during the Covid-19 pandemic has fueled Majestic to grow on a faster clip in the state.
“Phoenix is a hot market and industrial is a hot asset class, so now we have the chance to capitalize on the accelerant that’s been poured into the market,” Simmons said.
Most of Majestic’s projects are speculative and made to be adaptable for different users. Despite the influx of speculative industrial development in the Valley, Simmons said the market has continued to absorb spec projects, often before they are completed.
According to CBRE Group Inc., the industrial vacancy rate across the Valley dropped to 4.7% in the second quarter, and the Valley saw 6.3 million square feet of net absorption for the quarter.
“There’s the old phrase, ‘if you build it, they will come,’ and they are certainly coming these days,” he said.
Link to Original Article: https://www.bizjournals.com/phoenix/news/2021/07/20/california-industrial-developer-leases-expands.html