Mortgage And Real Estate News

Sunday, November 27, 2011

Dick's Sporting Goods buys W. Valley warehouse

Dick's Sporting Goods Inc. has completed the purchase of a 60-acre site in Goodyear to build a 600,000-square-foot fulfillment and distribution center expected to employ about 300 workers beginning in early 2013.

The sale first was reported in local real-estate publication Business Real Estate Weekly of Arizona and was confirmed Friday by a real-estate broker involved in the deal.

Dick's, a national retail chain based outside Pittsburgh, reportedly paid about $5.8 million for the property, located inside a 1,600-acre office and light-industrial park along the Loop 303 freeway alignment, about 2 miles north of Interstate 10.

The business park is called PV303 and was developed in 2008 by SunCor Development Co.

The seller was a joint venture involving Scottsdale-based Sunbelt Holdings LLC and Dallas-based Rockpoint Group LLC.

Commercial-real-estate broker Jones Lang LaSalle of Phoenix brokered the deal.

Sunbelt and Rockpoint acquired the property as part of a $65 million portfolio of commercial-real-estate assets SunCor sold to the joint venture in 2010.

Construction on the $30 million distribution center is scheduled to begin before Jan. 1 and wrap by January 2013.

Dick's, a publicly held company listed on the New York Stock Exchange under the symbol DKS, owns and operates more than 450 Dick's Sporting Goods stores in 42 states, according to the company's most recent financial-disclosure statement.

It also owns Golf Galaxy Inc., which operates about 80 golfing-equipment stores in 30 states.

Internet commerce outlets such as Amazon.com are driving a dramatic resurgence in demand for warehouse space in the Phoenix area, particularly in the West Valley.

Users of industrial real estate snapped up 1.6 million square feet of empty space in the third quarter, which marked the seventh consecutive quarter of rising demand, according to a recent report from commercial-real-estate firm Colliers International in Phoenix.

The Colliers report said industrial tenants have absorbed about 9.3 million square feet of vacant space during the past seven quarters.

The surge in demand is likely to continue, as large e-commerce providers continue to seek additional space for order-fulfillment and distribution centers to serve Arizona, California and other Western states.

Seattle-based Amazon.com announced plans in July to open a 1.2 million-square-foot distribution center at 800 N. 75th Ave. in Phoenix, its fourth such facility in the Phoenix area.

The company ultimately plans to expand its West Valley presence by another 2 million square feet, area brokers have said.

Several retailers also have opened or expanded regional distribution centers in the West Valley recently, including Gap.com and Macys.com.

Most fulfillment- and distribution-center jobs are relatively low-level positions involving unskilled labor.

A high percentage are seasonal, lasting only through the busy holiday shipping season from October through January.

Because of growth in the distribution-center sector, the vacancy rate among industrially zoned properties in Maricopa County has plummeted from nearly 18 percent in the first quarter of 2010 to 14.6 percent at the end of the third quarter this year, a recent Colliers International report said.

High demand also is driving new construction, according to Colliers' third-quarter analysis, with nearly 3.7 million square feet of warehouse and distribution-center space under development.

The industrial sector has not seen such a high level of activity since before the commercial-real-estate market crashed in 2008, brokers said.

In general, most e-commerce providers have chosen not to locate their West Coast distribution centers in California because of its much higher real-estate costs.

Analysts said many online and catalog retailers have settled on a two-pronged strategy, with order-fulfillment centers in metro Phoenix to serve Southern California and in Reno to serve Northern California.

by J. Craig Anderson The Arizona Republic Nov. 19, 2011 12:00 AM



Dick's Sporting Goods buys W. Valley warehouse

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