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  • Writer's pictureArizona Contractor & Community

EastGroup Properties Assembles 50 Acres for High-Demand East Valley Industrial

In a series of transactions underscoring the tightening supply of developable land in metro Phoenix’s Southeast Valley, EastGroup Properties, Inc. (NYSE: EGP) has assembled and closed on 50 acres in the Phoenix Mesa Gateway Airport submarket for the development of Gateway Interchange, a Class A industrial development.

Totaling 655,400 square feet and seven buildings, Gateway Interchange will sit at the northwest corner of Hawes and the Loop 202 in Mesa, Arizona. The acreage for the property was purchased from four separate ownership groups and assembled into a single parcel with 2,600 feet of coveted Loop 202 freeway frontage.

The project will be developed, owned and managed by EastGroup, a self-administered equity real estate investment trust focused on the development, acquisition and operation of industrial properties.

“This is arguably one of the East Valley’s best parcels for commercial development, but was not appearing in traditional site selection searches due to multiple ownership entities, including a parcel owned by ADOT that had to be purchased at auction,” said EastGroup Vice President Mike Sacco. “I’m very proud of the creativity and diligence of our team to secure and consolidate this parcel, and for the project that we will be developing here – a modern industrial offering with the latest in high-tech manufacturing and logistics advantages, featuring employee amenity areas that rival any new industrial development in the market today.”

“With the tremendous demand in Mesa’s Gateway area for large plate industrial space and Gateway Interchange’s strategic location, we see this development as a prime location for aerospace, electric vehicle and advanced manufacturing companies,” said Mesa Economic Development Director Bill Jabjiniak.

Senior Managing Directors Steve Larsen and Pat Harlan, and Senior Vice President Rick Collins from the Phoenix office of JLL represented EastGroup in the land assemblage and purchase, and will serve as the project’s exclusive leasing brokers.

Steve Larsen

The sellers assemblage was represented by Jason Barney and John Hartman with High Bridge Partners as joint venture partners.

“This was an impressively collaborative process that brought together EastGroup, the City of Mesa and long-time, individual landowners to create an opportunity that will bring truly excellent new industrial space to the Gateway Airport submarket,” said Larsen. “It is the right product at the right time, for an area that is highly sought after for its educated workforce and its growing foundation of advanced manufacturing and supply-chain users.”

According to JLL research, the Southeast Valley ranks among one of metro Phoenix’s most desired industrial locations, enjoying 8.8 percent year-over-year rent growth with just a 5.8 percent vacancy rate.

Spaces at Gateway Interchange will range from 13,440 to 180,000 square feet and feature 28’ to 32’ clear height, 7” floor thickness, abundant power, full concrete truck courts, dock high and ground level loading, LED warehouse lighting and ESFR sprinkler systems.

Pat Harlan

From an amenity perspective, the buildings will include glass roll-up doors leading out of break rooms to covered patio areas, six outdoor amenity nodes that are interconnected by trails and feature patio tables and chairs for outdoor dining, and turf areas for cornhole and other outdoor games.

The project will be developed in two phases. Phase I will consist of four buildings totaling 359,700 square feet. Phase II – which could also support build-to-suit requirements – is slated for three buildings totaling 295,700 square feet.

The entire project is located directly off of a full diamond interchange at Loop 202 and Hawes Road, with immediate access to the Loop 202 and nearby State Route 24, and linking the project to a workforce of more than 1.4 million people within a 30-minute drive. It also sits just one-half-mile north of Phoenix Mesa Gateway Airport, a 3,000-acre campus and commercial airport.

Willmeng Construction has been selected as the general contractor for Gateway Interchange. Butler Design Group is the architect. Construction on Phase I is slated to begin the third quarter of 2022 with delivery by the second quarter of 2023.


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