DEER VALLEY INDUSTRIAL-Q2 2016

CUTLER COMMERCIAL

2150 East Highland Ave. #207

Phoenix, 85016

602-955 3500

WWW.CutlerCommercial.com

All information furnished is from sources deemed reliable. No representation is made as to the accuracy thereof and it is submitted subject to errors, omissions, changes, or withdrawal without notice and to any special listings conditions, including the rate and manner of payment of commissions

for particular offerings imposed by principals or agreed to by the company, the terms of which are available to interested principals or brokers. All dimensions are approximate. Owner and/or Broker make no representations expressed or implied as to the accuracy of floor plan/site plan dimensions.

Ian P. Turner

DIRECT:

602 386 1245

CELL:

602 324 9111

EMAIL:Iturner@

Cutler Commercial.com

Ian P. TurnerEDUCATE | ADVISE | GUIDE

DEER VALLEY BY THE NUMBERS

Q2 2016

1ST

HALF

2016


Phoenix, 85016

602-955 3500


All information furnished is from sources deemed reliable. No representation is made as to the accuracy thereof and it is submitted subject to errors, omissions, changes, or withdrawal without notice and to any special listings conditions, including

the rate and manner of payment of commissions for particular offerings imposed by principals or agreed to by the company, the terms of which are available to interested principals or brokers. All dimensions are approximate. Owner and/or Broker

make no representations expressed or implied as to the accuracy of floor plan/site plan dimensions.

Dear Reader

My TAG Line is EDUCATE | ADVISE | GUIDE.

The first part of assisting either a Tenant, Investor, or Owner/User is to EDUCATE them on the

market. A key part of this process is to look at the overall historical perspective and to see where

we are in the market cycle.That is the reason I follow and share Deer Valley by the Numbers

insights into the submarket since January of 2015.

While I believe my data, insights, and opinions are accurate, they are just one man’s opinion.

THE INFORMATION AND OPINIONS SHARED IN THIS REPORT ARE MY OWN AND

DO NOT REFLECT OR REPRESENT THE OPINIONS OF CUTLER COMMERCIAL.

Please feel free to contact me for more information or to specifically get an opinion on your

property.

Ian

DEER VALLEY BY THE NUMBERS MID-YEAR 2016 2


Phoenix, 85016

602-955 3500





As of this writing in early September of 2016, several issues that may affect the Commercial Real Estate Market come to mind. They are the

Presidential Elections, the imminent hike in interest rates that is inevitable, and the fact that we are in a Bull Market for the last 8 years.

The first is the U.S. Presidential Election, now in full swing, and the nation is essentially in a holding pattern. Without getting into a political

discussion, it is safe to say that the majority of the electorate, the common man, has little inspiration from the choice of candidates presented. How

does this trickle down to Commercial Real Estate, specifically in Deer Valley? That is anyone’s guess….but the small business owners who are the

tenants and owners of those same small businesses are also wondering what the future holds.

The second issue is interest rates. If I am reading the tea leaves correctly, due to improving economic factors, the U.S. will almost surely see interest

rates go up by years end. This should make CAP Rates rise and subsequent values decline on the investor side. It will also change the Lease Vs. Buy

dynamic. As the interest goes up, so does the payment. This could potentially eliminate potential Owner/User purchases.

Lastly, we are almost into 2017 and arguably into a recovery since 2008 for over 8 years, depending on who you ask. Market cycles are usually 7-

10 years, so we may be due for another recession shortly. Evan the weatherman who constantly predicts rain is eventually right!

Deer Valley Metrics

The Deer Valley Industrial market continues to be a bright spot in the Valley. The average vacancy rate in the Valley Industrial market was 10.4%

with Deer Valley showing an overall vacancy of 7.7%. Rental rates throughout the Valley were $6.80 ($.57) PSF, while in Deer Valley they are

$9.03 ($.75). Velocity of sales picked up dramatically in Q2 of 2016 after a very slow start in the first quarter. The weighted average price per square

foot dropped from $103 PSF to $89 PSF as influenced by the sale of several larger portfolio transactions of multi-tenant investment buildings. The

average building in the Deer Valley Comparables traded in 2016 was $101 PSF, with a high of $145 PSF and a low of $49 PSF. (See pages 10/11

for details.) The average land value PSF was $6.25 with a high of $14.17 PSF and a low of $2.54. (See pages 12/13 for details.)

The next chapter in the cycle is that new buildings that have been built and leased are being brought to market as investment sales. Other developers

have jumped in the game and there are 3-7 new projects with new industrial space being announced. The industrial market is strong, but if I was

asked to guess I would say we are in the 7the inning in this ball game. Stay tuned for more next quarter!

Ian



Phoenix, 85016

602-955 3500





PHOENIX INDUSTRIAL MARKET PERSPECTIVE



Phoenix, 85016

602-955 3500





NORTHWEST SUBMARKET INDUSTRIAL



Phoenix, 85016

602-955 3500





DEER VALLEY INDUSTRIAL



Phoenix, 85016

602-955 3500








Phoenix, 85016

602-955 3500





DEER VALLEY INDUSTRIAL BUILDINGS SOLD FIRST HALF 2016



Phoenix, 85016

602-955 3500





DEER VALLEY INDUSTRIAL BUILDINGS SOLD FIRST HALF 2016


# Sale Status Sale Date Quarter Property Address Sale Price Price Per SF Size

1 Sold 1/6/2016 1 21615 N 7th Ave $3,575,000 $101 35,318

2 Sold 1/29/2016 1 2340 W Parkside Ln, H-113/1st Floor (Part of Multi-Condo Sale)$443,175 $75 5,909

3 Sold 1/29/2016 1 23042 N 16th Ln $1,150,000 $107 10,792

4 Sold 2/1/2016 1 1070 E Lone Cactus Dr $1,537,560 $120 12,813

5 Sold 3/8/2016 2 24480 N 20th Dr $1,710,000 $145 11,782

6 Sold 4/1/2016 2 20813 N 19th Ave (Part of Portfolio) $12,940,000 $82 157,101

7 Sold 4/5/2016 2 23027 N 15th Ln, A/1st Floor $500,000 $111 4,500

8 Sold 4/18/2016 2 1515 W Deer Valley Rd, A-107/1st Floor $270,725 $101 2,690

9 Sold 4/25/2016 2 17453 N 25th Ave $1,715,000 $65 26,260

10 Sold 4/29/2016 2 2215 W Melinda Ln $1,045,000 $98 10,637

11 Sold 5/3/2016 2 22415 N 18th Dr $1,300,000 $106 12,243

12 Sold 5/11/2016 2 4235 W Opportunity Way, 104/1st Floor $405,000 $96 4,210

13 Sold 5/16/2016 2 2340 W Parkside Ln, H101-103/1st Floor $1,200,000 $119 10,095

14 Sold 5/20/2016 2 1950 E Deer Valley Rd $450,000 $49 9,200

15 Sold 5/24/2016 2 2010 W Parkside Ln $325,000 $116 2,812

16 Sold 5/26/2016 2 17855 N Black Canyon Hwy $2,000,000 $111 17,985

17 Sold 5/31/2016 2 1635 W Parkview Ln $850,000 $112 7,556

Sale Price Price Per SF Size

AVERAGE $1,848,027 $101 20,112

HIGH $12,940,000 $145 157,101

LOW $270,725 $49 2,690


Phoenix, 85016

602-955 3500





DEER VALLEY INDUSTRIAL LAND SOLD FIRST HALF OF 2016



Phoenix, 85016

602-955 3500





DEER VALLEY INDUSTRIAL LAND SOLD FIRST HALF OF 2016


# Sale Date Property Address Property City Zoning PSF Price Per AC Land Sale Price Land Area SF

1 1/29/2016 1402 W Victory Ln (Part of Multi-Property Sale)Phoenix CP/GCP 4.29$ 186,982$ 210,000$ 48,922

2 1/29/2016 1410 W Victory Ln (Part of Multi-Property Sale)Phoenix CP/ GCP 4.65$ 202,755$ 290,000$ 62,303

3 2/23/2016 1739 W Parkview Ln Phoenix R-43 5.05$ 219,971$ 1,075,000$ 212,877

4 3/15/2016 W Happy Valley Rd Phoenix C-2 14.17$ 617,284$ 500,000$ 35,283

5 3/31/2016 18 W Camino Del Rio Phoenix I-1 5.45$ 237,600$ 240,000$ 43,999

6 3/31/2016 500-650 E Pinnacle Peak Rd Phoenix I-1 5.50$ 239,643$ 2,950,000$ 536,223

7 3/31/2016 23742 N Central Ave Phoenix A-1/SP 2.54$ 110,512$ 4,100,000$ 1,616,076

8 4/27/2016 715 E Covey Ln Phoenix I-1 6.87$ 299,341$ 300,000$ 43,655

9 6/8/2016 SE 23rd Ave & Alameda Rd Phoenix A-1 7.30$ 318,182$ 7,000,000$ 958,320

10 6/24/2016 2147 W Adobe Dr Phoenix A-1 6.13$ 267,211$ 550,000$ 89,659

11 7/21/2016 23439 N 35th Dr Phoenix CP BP 5.49$ 239,156$ 290,000$ 52,820

12 7/27/2016 7th St Phoenix A-1 7.65$ 333,184$ 450,532$ 58,901

PSF Price Per AC Land Sale Price Land Area SF

AVERAGE 6.26$ 272,652$ 1,496,294$ 313,253

HIGH 14.17$ 617,284$ 7,000,000$ 1,616,076

LOW 2.54$ 110,512$ 210,000$ 35,283


Phoenix, 85016

602-955 3500





Prepared By:Ian P. Turner, MREDAssociate Broker, Cutler Commercial

CONTACT INFO

EMAIL: [email protected]

Cell Phone: 602 324 9111

Direct: 602 386 1245

Website: WWW.IanPTurner.com

FOCUSES ON:

*Tenant Representation

*Buyer Representation

*Landlord Representation


Methodology and Source

All information is downloaded from CoStar. It is then

filtered, sorted, manipulated and analyzed in Excel.

The goal is to provide a quarterly perspective of how

the Deer Valley Industrial Market is performing.

If you have questions or comments or want the

latest info, please call Ian:

mailto:[email protected]

DEER VALLEY INDUSTRIAL-Q2 2016

Real Estate

Transcript of DEER VALLEY INDUSTRIAL-Q2 2016