The Northwest is Phoenix’s third-smallest industrial submarket behind 51 Corridor and Scottsdale, but it is posting big activity, attracting two of the largest owner-built facilities of the year:
- REI — A 400,000 square foot fulfillment warehouse in Goodyear
- IRIS USA — A 384,373 western regional headquarters in Surprise
Both REI and IRIS praised the cities of Goodyear and Surprise, attributing business-friendly environments and “holistic communities” as reasons for locating in the Northwest. But the submarket has much more to offer companies, especially when compared to the Southwest submarket, the largest industrial submarket within Metro Phoenix.
Northwest provides users access to a different employee base that allows companies to leverage higher wages and a more skilled labor force. These are key requirements for companies focused on food and beverage, value-add assembly and manufacturing operations – all clients that are common in the Northwest Valley and much different than the traditional warehouse and distribution companies found in the Southwest market.
A quick comparison of two newly completed facilities (McLane Foods in the Southwest and IRIS USA in the Northwest) reveals the differences between the neighboring submarkets… For example, the median household income within 5 miles of the McLane Foods facility is $39,295, with 15.1 percent of the population having an Associate’s degree or higher. The IRIS USA facility, in comparison, has a median household income of $48,054 within 5 miles (a 22 percent increase from the Southwest) and 31.1 percent of the population has an Associate’s degree or higher (nearly double that of the Southwest).
In addition, the Northwest submarket provides extremely convenient access to the entire Metro Phoenix and California ports through the Loop 303, and close proximity to Interstate 10. This access will get even better with the planned expansion of the Loop 303 to Interstate 17.
Today, the Northwest has a much greater amount of smaller inventory than the Southwest submarket, providing enough space to satisfy this segment of the market, while at the same time offering ample opportunity for growth in the large and mid-size sectors.
“We are on the cusp of seeing speculative development occur in the Northwest submarket,” said JLL Managing Director Anthony J. Lydon. “Thus far, the development we have seen has been corporate design build but as the submarket continues to grow, we expect to see spec developments that will attract midsize industrial users. Right behind that will be the development of space solutions for smaller operators. This is definitely an emerging market and it is exciting to see it grow.”
About the author
Kiana Cox is a senior research analyst in the JLL Phoenix office who works closely with brokerage and support professionals throughout the western region, as well as colleagues throughout the global JLL organization, to provide best-in-class research that differentiates JLL.