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DAUM Commercial Real Estate Services has announced the groundbreaking of Gateway Executive Airpark, a three-hangar development totaling more than 185,500 square feet at Phoenix-Mesa Gateway Airport in Mesa, Arizona.

Gateway Executive Airpark, which is now leasing and will be available for occupancy by Q4, is a state-of-the-art, full-service hangar facility including multi-tenant and freestanding hangars, according to Steve McKendry, Principal and Executive Vice President at DAUM Commercial, who is an exclusive listing agent for the property alongside DAUM Executive Vice Presidents Chris Rogers and Trevor McKendry.

“Private jet services for both business and leisure travel have proven to be much more resilient than commercial airlines throughout the pandemic,” says Steve McKendry. “A year on, many corporations still do not want their executive teams flying commercial airlines, and individuals are placing safety first and considering private flights when they never would have previously. Business aviation has improved 30% from this time a year ago, about 8% less than pre-pandemic 2019. The improvement is due to not only safety issues but is reflective of economies opening up and travel restrictions being removed. In contrast, scheduled airline activity is down about 18% from this time in 2020 and 44% from 2019.”

Steve adds that COVID-19-related hesitancy will continue for several months, possibly years. Unrelated trends, including a such a shortage of first-class seats as airlines redesign their interiors, could also make private jet travel more appealing.

“Despite the unprecedented challenges faced this past year, this is still an ideal time to strategically deliver a development like the Gateway Executive Airpark to the greater Phoenix market,” explains Rogers. “Major corporations, including Microsoft, Google, and Apple, are expanding in the area, driving potential demand for executive travel. There has also been an influx of development of new aeronautical facilities near Phoenix-Mesa Gateway Airport in particular, bringing additional business to the submarket.”

Advantages of the Phoenix-Mesa Gateway Airport location of this project also include reduced taxes and lower operating costs through unique tax programs and incentives.

“While we are anticipating strong local demand from large corporations and high-net-worth individuals, this space could also be attractive to private jet owners and branded charter services based elsewhere,” adds Trevor. “For instance, even with the additional travel required, the significantly lower rental rates and tax incentives make holding aircrafts at the Phoenix-Mesa Gateway Airport approximately 70% less than anywhere in Southern California.”

The hangars are constructed with steel frame infrastructure, metal exterior walls and metal roof. The steel frame infrastructure provides clear span bays necessary for aircraft maneuvering. Additionally, Gateway Executive Airpark features office space built to suit tenant’s requirements, LED overhead lighting with on/off motion sensors in hangars, sealed concrete floors and hangar doors 28’ high with widths spanning 90’ to 110’.

Developed to accommodate the increasing demand trend for the larger long range business jets, the dimensions of the hangar bays and hangar doors at Gateway Executive Airpark will accommodate larger jets, such as the new Gulfstream 700, multiple aircraft, and other aviation uses such as maintenance, repair, and overhaul (MRO) operations.

Steve adds: “As part of our involvement with this project, we’ve been keeping our finger on the pulse of the hangar space market to truly understand the demand drivers and current local market. Only in recent years have hangars been designed for larger executive jets, which has resulted in a market that currently has very little availability of hangars designed to accommodate long-range executive jets.”

Situated adjacent to Textron’s Citation Service Center and Embraer Executive Jet Service Center, Gateway Executive Airpark is located at 5559 S. Sossaman Road in Mesa, Arizona. Additional details on the development and leasing information can be found at https://www.gatewayhangars.com.

The tenant is planning extensive renovations, including the addition of an EV charging station.

DAUM Commercial Real Estate has negotiated the lease of an 82,000-square-foot warehouse and office property in the Santa Monica submarket of Los Angeles. The new tenant, a major electric vehicle company, agreed on a long-term commitment, paying approximately $12 million for the space.

Vice Chairman Michael Collins together with Executive Vice President David Freitag of DAUM Commercial represented the owner—a private entity active in the Southern California industrial market.

The new tenant is expected to occupy the space next quarter and will subsequently make extensive renovations and upgrades, Collins told Commercial Property Executive. The building is slated to offer maintenance, repair, delivery and charging for electric vehicles. Caliber Collision, an auto body repair and paint shop, was the previous tenant of the property for 20 years.

The building is located at 1100 Colorado Ave. on a 121,200-square-foot site. The warehouse, built in 1971, features an 18-foot clear height, a wrought-iron fence, 2,000 amps of extensive power and a parking ratio of 1.6/1,000.

The space at 1100 Colorado Ave. provides an opportunity for the new tenant to potentially expand to a total of about 132,000 square feet in the following years. An adjacent, 50,000-square-foot property, owned by the same entity, is currently leased to Mercedes-Benz. Other nearby businesses include Lexus, Amazon, HBO and Universal Music.

The firm worked on behalf of Hopewell Development to secure the tenant for the new facility in a western suburb of the city.

DAUM Commercial Real Estate Services has arranged the lease of a recently built industrial warehouse in the Phoenix suburb of Tolleson, Ariz. The firm worked on behalf of Calgary, Canada-based Hopewell Development, whose U.S. portfolio also includes properties in Texas and Nevada.

National distribution company Republic National Distributing Co. leased the space within two months of the property’s completion. The 173,940-square-foot lease consideration amounts to $12 million.

DAUM’s Executive Vice Presidents Chris Rogers and Trevor McKendry, along with Associates Dan Casey and Parker Houston completed the deal.

Located at 320 S. 91st Ave., the building features 28 dock-high loading doors, a 32-foot clear height, 3,600 amps, R-19 insulation, four grade level doors, a fenced and gated concrete truck court with 130-foot depth, an ESFR sprinkler system and LED lighting.

The unoccupied land was sold to Hopewell back in June of 2019. Rogers noted that the company then partnered with Sunstate Builders in delivering the state-of-the-art property. McKendry added in prepared remarks that Republic National Distributing Co. was attracted to the location because it is situated 10 miles outside of downtown and offers convenient access to Interstate 10.

Cushman & Wakefield’s Andy Markham and Will Strong, along with Mike and Phil Haenel, represented the new tenant. DAUM has been very active in arranging leases within the Phoenix area. In August, the company represented the landlord and assisted tenant Empire Metal Products in the lease transaction of a 42,000-square-foot industrial property.

DAUM Commercial Executive Vice Presidents Gus Andros and Andrew Lara discuss the metro’s industrial market and dive into what the future holds for the region.

The Inland Empire, historically regarded as a key industrial market, saw record-level demand for industrial space as online sales surged during the pandemic. In the fourth quarter of 2020, some 19.1 million square feet of industrial space was leased, slightly down from 19.8 million square feet in the third quarter, according to JLL’s fourth-quarter market report. Although around 19.7 million square feet of new product was delivered in 2020, supply still lags demand, the same document revealed.

Due to limited land availability, however, it is increasingly more challenging to fulfill the need for industrial space in the region. DAUM Commercial Executive Vice Presidents Gus Andros and Andrew Lara discuss whether the Inland Empire has room for more growth and how the increased demand is reshaping market fundamentals.

The pandemic has boosted the need for industrial space across the country. How has the Inland Empire benefited from this sudden increase in demand?

Andros: Historically, the Inland Empire has benefited due to its proximity to the Los Angeles and Long Beach ports of entry—where the product has come in from Asia—as well as major population centers. It has long been a key region for major distribution and e-commerce facilities.

The rapid increase of demand for online shopping options due to the pandemic has created an even greater need for industrial facilities in the region, especially those ranging over 100,000 square feet and those that best accommodate last-mile delivery.

With industrial continuing to prove itself as one of the more in demand, steady and relatively safe sectors of real estate, more institutional capital is flowing into the region. Many businesses are relocating to the Inland Empire as they are priced out of Los Angeles submarkets like City of Industry, Mid-Cities and the South Bay.

Demand is outpacing supply which, in turn, is impacting land values, sale prices and lease rates significantly.

How has increased demand impacted industrial development in the region? What can you tell us about the current development pipeline?

Lara: Prior to the pandemic, the Inland Empire was a top-performing industrial market in Southern California and even nationally. Over the last 10 years, developers active in the region have been continuously searching for available land.

Even before the accelerated demand for e-commerce space, we were already seeing a move toward more industrial development into the eastern area of the Inland Empire, as far as 60 to 90 or more miles from the ports. For example, we recently sold a site for a 1 million-square-foot, build-to-suit industrial building, located on a 60-acre parcel in Hesperia.

What type of industrial facilities are most popular among tenants?

Andros: Industrial facilities that feature best-in-class distribution amenities such as high clear heights, multiple dock doors and secured truck courts are the most attractive to today’s tenants.

Where have you seen the most leasing activity?

Lara: We are seeing strong activity throughout the Inland Empire, in the traditional western hubs as well as further east, including the High Desert area.

Tell us about the main challenges the Inland Empire’s industrial sector had to face in 2020.

Andros: The main challenge that the Inland Empire’s industrial sector faced in 2020 was keeping up with the velocity of tenant demand. The acceleration of e-commerce on a large scale created a further sense of urgency, putting pressure on occupancy timelines, especially with buildings nearing completion.

What are some of the emerging markets within the Inland Empire? Does the region provide room for more growth?

Lara: Some of the emerging markets for industrial development and activity are High Desert—Hesperia, Victorville and Apple Valley—as well as South Perris and Beaumont/Banning to the east.

While there is absolutely room for more growth into these markets, developers must get creative and adjust their strategies to accommodate markets with limited land availability, as many areas of the Inland Empire West have become infill submarkets like those in Los Angeles.

How do you expect the Inland Empire’s industrial landscape to evolve in 2021 and beyond?

Andros: As brokers with decades of experience in the Inland Empire, we have helped countless investors and tenants alike secure rare and lucrative opportunities to develop, acquire or lease space in the area. We have been successful at doing so because we have identified alternatives beyond their typical submarkets and requirements.

Normally in December and early January, tour requests and proposal submissions typically decrease. Fortunately, that has not been the case this year. There has been heightened activity immediately from the start of 2021 and we expect this strong momentum to continue. As activity continues to increase, we will see lower vacancy rates with increased competition.

DAUM Commercial Real Estate Services has secured the lease of 250,000 square feet of industrial space in the greater Phoenix submarket of Glendale, Arizona on behalf of the lessee, Dynarex Corporation, a medical equipment and supply wholesaler based in Orangeburg, New York.

The space will serve as the lessee’s Southwest regional distribution facility, according to DAUM Associate Carter Wilson, CCIM, who completed the lease transaction alongside DAUM Executive Vice President David Wilson, CCIM.

“Dynarex Corporation is experiencing a phase of significant growth, bolstered by a strong, ongoing demand for durable medical equipment and disposable products,” explains Carter. “As part of the firm’s expansion throughout the West and Midwest, they came to us seeking a greater Phoenix location to utilize as a central hub for the firm’s operations throughout the Southwest.”

Carter notes that the DAUM team secured space that met the lessee’s requirements in the Northwest Phoenix submarket, which is currently seeing high demand, with vacancy rates compressing to sub-5% levels in Q4 2020.

David adds: “With this new lease, Dynarex is ensuring its presence is known in the region and positioning itself for future success. We were able to secure a prime location within proximity to the 101 freeway, providing ease-of-access throughout the greater Phoenix area and the Southwest.”

Dynarex will occupy approximately 40% of a 620,000 square-foot industrial property. The facilities feature 32-foot clear height, 16 dock-high loading doors, and an ESFR sprinkler system.

The property is located at 7811 N. Glen Harbor Boulevard in Glendale, Arizona.