KKR makes a $ 68 million industrial investment in Phoenix

120 E. Watkins St.

As part of its opportunistic equity real estate strategy for America, KKR has acquired an industrial portfolio of five buildings, 540,000 square feet for $ 68 million in Phoenix. According to CommercialEdge, the previous owner was Lincoln Property Co., which purchased the assets in separate transactions between 2002 and 2014.

The deal marks the second industrial property purchase by KKR im Tal in 2021 and expands the company’s total industrial footprint in Phoenix to around 2.5 million square feet. In its first acquisition this year, the company paid $ 43.1 million for a 263,000 square foot warehouse in Goodyear, Arizona, according to CommercialEdge.

Three of the properties are within a mile of 4441 W. Polk St., 4720 W. Van Buren St. and 5240 & 5302 W. Buckeye Road in the Phoenix West submarket. The fourth occupies over 4 acres at 120 E. Watkins St., less than 2 miles south of downtown Phoenix and 10 miles from the other portfolio components.

All assets are last mile warehouses completed between 1980 and 1990, as CommercialEdge shows, with an average headroom of 25 feet. The portfolio was fully let at the time of sale. Tenants included Trendwood Inc. and Express Furniture Rental.

Good times for industrial transactions

Phoenix ranked third in the top 10 markets for industrial transactions in 2020, according to CommercialEdge data. A total of 141 properties and portfolios traded for a total value of more than $ 2 billion last year, up 22.3 percent from 2019.

The Phoenix West submarket accounted for around $ 950 million in investments in industrial real estate, nearly half of the total amount of the subway. The submarket’s largest transaction involved a 684,420 square foot industrial center on West Buckeye Road, which changed hands for $ 72.5 million. The property was last traded in 2018 for $ 48.5 million.

The first quarter of 2021 continued the strong investment activity of the previous year. With the exception of KKR’s most recent transaction, five properties in Phoenix West changed hands, totaling nearly 1.2 million square feet, CommercialEdge shows. As part of its largest deal, Link Logistics acquired a 682,291 square foot warehouse on S. 75th Ave. 1755 and funded the purchase with a $ 43 million loan from Wells Fargo Bank.