Developers start construction on West Valley site originally envisioned for industrial center 20 years ago

Dermody Properties, a Nevada-based company, has begun construction of what will become a historic industrial center for the small West Valley City of El Mirage located about 30 minutes north of downtown Phoenix.

The LogistiCenter Copperwing will be worth $1.5 billion and feature over 10 million square foot of speculative area. It will cover 1,000 acres in the next decade.

Dermody, along with its partners, broke ground for the first phase on Wednesday near the Southwest corner of Peoria Ave and El Mirage Road. The first phase will consist of two buildings with a total area of 566,602 sq. feet.

The project, as one of the biggest industrial centers in the State, will be a game changer for El Mirage. Previously, El Mirage had only land to offer prospective employers.

The site is located close to the newly improved Northern Parkway and Loops 101, 303, and Luke Air Force Base. The first phase of construction is expected to be finished by June 2024.

The leasing brokers are Pat Feeney of CBRE Group Inc., Tyler Vowels of CBRE Group Inc., and Dan Calihan from CBRE Group Inc., named after the Air Force Base and Copper, one of Arizona’s five Cs along with citrus, cattle, cotton and climate.

HPA Architecture, a Californian firm, is the architect and general contractor. HOOPP, a Canadian-based pension plan called Healthcare of Ontario Pension Plan (HOOPP), is the investment partner for this project. U.S. Bank was the construction lender.

Twenty years of making

John F. Long Properties was a prominent Valley developer who spearheaded growth in west Phoenix. He has owned the site for many years and it had been primarily used for farming.

Long had owned the land, which used to be about 1,400 acres in size, for many decades. According to the John F. Long Properties' website, El Mirage City Council had approved a planned development area for an employment centre in 2000.

Long's aim was to create a buffer around Luke Air Force Base and protect it by limiting the residential development near the base. The noise contours are the reason why much of Glendale's land is slated to be warehouses instead of housing near the Loop 303.

El Mirage was not developed for years because the infrastructure, such as roads and water services, were still being built or installed. Phoenix-based Novo Development LLC, along with John F. Long Properties, worked on the El Mirage site to bring infrastructure like an Epcor Water USA plant for the area.

Feeney, of CBRE who began marketing the site as for sale around 10 years ago, stated that it took some time before developers started to seriously consider building here until a few years prior to the Covid-19 epidemic.

He said that industrial growth was slow south of Interstate 10 to Tolleson and then accelerated in the West Valley once the Loop 303 Extension was completed in 2018. The Loop 303 extension was completed in 2018. This was then followed by major industrial projects, such as Sub-Zero and White Claw plants, Red Bull distribution centers and multiple distribution centres in Goodyear and Glendale.

Feeney stated, "It has always been a slow but steady progress up and west. Phoenix has never moved faster than that." They didn't know that the market would be here. "Now it has been steamrolling into the west and north."

Dermody bought the site from John F. Long Properties

Pat Gallagher said that John F. Long Properties had expressed interest in selling the site to Dermody.

Gallagher stated that "we had a longstanding relation with some members of the Long family, and their consultants." They approached us and asked if we would be interested in buying it. They wanted to close quickly, and they had specific needs. We had the capital for that. It was a combination of our relationship and capital strength."

John F. Long Properties reached out to over 10 companies in order to sell the site. Dermody was at the top of that list, according to Justin Miller, who is a partner with Novo Development which still has ties to the industrial park.

Dermody acquired the site for $52 Million at the end 2021. It was the largest purchase in company history. The industrial center is the first project the company has undertaken in Arizona. After 14 months, the company is now starting construction on the site.

Gallagher stated that "LogistiCenter Copperwing has a perfect location in the West Valley." We feel that we are right in the center of the growth area.

El Mirage gave its support last year to the designation of about 700 acres at Copperwing's LogistiCenter as a magnet site for foreign trade zones, which reduces property tax.

El Mirage opens new doors

El Mirage can compete with other industrial corridors that are growing fast in Goodyear and Glendale by attracting potential employers and creating hundreds of jobs.

Tom Doyle, El Mirage's economic development manager, says that most leads from the Greater Phoenix Economic Council and Arizona Commerce Authority come in the form of existing buildings. He said that in the past they could only compete with projects by offering built-to-suit options, but now many companies are looking for speculative properties to save time and money.

Doyle stated that these are his first speculative building. Doyle said that with these buildings, we will be able apply for leads looking for existing building or build-to suit. We're excited to have the opportunity to pursue those two types of leads.

Dermody Properties will primarily target logistics users who are looking for modern distribution building that offer spaces between 100,000 square feet and more than one million square feet. Feeney stated that the industrial park is a finalist in a few potential build-to suit opportunities.

The West Valley has seen a strong industrial demand in recent years, and this is expected to continue into 2023. CBRE Group Inc.'s research indicates that the Valley is home to nearly 50 million sq. ft. of space-seeking tenants. Phoenix metro is also the fastest-growing market for industrial space in North America, partly because of the demand for buildings larger than 200,000 square foot.