Developer Signs Ground Lease For 1M SF Industrial Project In Phoenix
A new 99-year ground lease agreement will bring a massive light industrial project to Phoenix’s Salt River community.
Industrial developer Majestic Realty Co. announced last week that it has partnered with the Salt River Pima-Maricopa Indian Community and certain allotted landowners on the 59-acre project, which will feature up to eight Class-A industrial buildings spanning about 1M SF.
Financial terms of the deal have not been disclosed.
The lease agreement is a boost for tribal economic development and marks a strategic expansion for the California-based developer. It also reflects how Phoenix continues to draw investment in the industrial space. The market is attracting “record levels of investor interest and economic development activity,” according to a Q1 report by Colliers, with total sales volume reaching $990.8M across 61 transactions in the first quarter.
The deal also marks Majestic’s first time in its 80-year history partnering on a ground lease with a tribal community in the U.S.
The lease was the result of years of “thoughtful planning” that evaluated several community voices before shaping a “shared development vision that balances economic growth with cultural stewardship,” Majestic Realty said in the release.
The project is in the planning and predevelopment phase and is expected to break ground in 2027, AZ Big Media reported. The site is located on North Pima Road and East McDonald Drive, with convenient access to Loop 101, one of Arizona’s top logistics corridors.
The project is designed for “long-term adaptability” and will aim to accommodate a variety of tenants and uses, according to the release.
The tribal community has previously supported other economic developments in the Phoenix area, including the Talking Stick Entertainment District, and has long opted to lease its tribal trust land rather than sell it. This new project in partnership with Majestic extends the community's reach into the industrial space.
The Majestic-SRPMIC collaboration comes as Phoenix's industrial market continues to see strong fundamentals. In the second quarter, the market saw net absorption of 4.7M SF, according to a CBRE report, 7.5% higher than the same period last year but 7.7% lower than this year’s first quarter. Phoenix continues to grow into a Tier 1 industrial market, with cumulative net absorption reaching a record 47.7M SF over the last three years.
Phoenix’s industrial vacancy rate declined to 9.6%, down from 10.3% the previous quarter, the report said.
