By Chris Keeley
Phoenix Commercial Brokers
Clients will often contact us to say; “I’m looking for this type of property or this type of space, can we go look at some?” Often times my answer is “There are no more spaces or properties currently available in Deer Valley Airpark that fit your requirement.” Which receives this response; “That’s impossible. I’ve driven around here and there’s signs everywhere…there has to be something.”
I admit that it looks like there is so much available space, buildings and signs everywhere, however, the truth is we are now very limited in our inventory in the airpark.
A few short years ago there was an abundance of any and every type of property and space available in the airpark. It is amazing to me, once the economy started to turn, how quickly the available inventory disappeared. Deer Valley Airpark has long been known for its surplus of industrial space with yards. It is a requirement that remains in demand today but this type of space is almost completely out of existence in today’s market.
You might recall the introduction of the industrial condo that flooded the industrial markets in 2005 and 2006. Deer Valley had a dozen or more projects with hundreds and hundreds of condos presented to the market at that time. Many projects sold out before they were completed they were so popular. The average size was 3,000 square feet, some with yards and most without. They flew off the shelves almost as fast as you could build them. Those small companies that were contributing and sharing in the boom were investing in these condos. Then starting in 2008, hundreds of these companies went bankrupt when the economy tanked and many of those condos went back to the banks. For years you could buy one of those condos for half their original sales price. The problem was there were no buyers in those down years. Dozens of these condos remained vacant and available at incredible discount pricing. Today there are only four, and they are no longer discounted.
From 2006 to 2008 there was so much new construction in Deer Valley you would have thought we were Las Vegas in the 60’s, with cranes everywhere, and every size and shape of new buildings under construction. Businesses were growing and the 10,000 to 25,000 square foot requirements were selling like crazy, most being constructed for spec. After 2008 the only buildings being built were for those very, very few build to suits and almost none in Deer Valley Airpark. No new industrial condos and no new 10,000 to 25,000 square foot spec buildings. Some of those condo developers got caught in their timing and lost everything. Most businesses were shrinking not growing. And if you needed to grow smaller there was plenty of inventory to choose from. Banks weren’t very inclined to lend either during the down years, so real estate collapsed from every angle at that time.
Moving forward to 2018 and it may look like 2008 again with business thriving and new construction happening all over Deer Valley. But rest assured our inventory has not stayed ahead of demand. There are less than six buildings for sale between 10,000 to 25,000 square feet and only one of those is new construction.
People are stunned when I tell them what they’re looking for is not available currently in this market. There are many new projects with available lease space in Deer Valley offering varying square footage for tenants but there are actually very little available buildings or condos for purchase and almost nothing with yards. Looks can be deceiving.