Mack Real Estate Group Takes Next Steps on Industrial Projects in Scottsdale, Deer Valley Article originally posted on Phoenix Business Journal on January 12, 2024 After a key approval from Scottsdale’s development review board, New York City-based Mack Real Estate Group is moving ahead on the build-out of two key industrial parks. Mack Real Estate Group (MREG) is looking at securing permits for grading, drainage, stockpile and tree salvage for the first phase of the Mack Innovation Park in north Scottsdale. Craig Henig, managing director for MREG, told the Business Journal that the firm hopes to secure those permits within Q1 2024 to start early construction work. While no leases have been signed, MREG is getting early inquiries from prospective users across industries. The Northeast Valley submarket where the industrial park would be located had just 13.85 million rentable square feet of industrial space as of Q3 2023, according to a report from CBRE Group Inc. That amounts to just 3.4% of the total rentable industrial market in the Phoenix metro. While more than 40 million square feet of new industrial is under construction, none of it is taking place in the Northeast Valley, according to the report. The first phase includes four buildings totaling roughly 570,000 square feet on the northern end of the 124-acre site. “We view this as the best remaining industrial-zoned parcel in the Valley,” said Richard Mack, co-founder and CEO of MREG. “We can look to the north Scottsdale airport market … the occupancy there is very high. The rents there are [among] the highest in the Valley. We expect it to be very well-received. The preliminary negotiations that we’re having seem to confirm the value of the land and our rent expectations.” When fully built out, the Mack Innovation Park will span 1.2 million square feet of industrial and flex office across 11 buildings between Pima and Bell roads, immediately east of the Loop 101 freeway. Getting to the point of build-out has been roughly two years in the works. MREG acquired the land at an Arizona State Land Department auction in March 2022 for $125 million. Several development groups pursued the site at the auction, which had an opening bid of $58.58 million. MREG beat out other bidders such as Baker Development Group, Verde Investments Inc., FCP Fund V REIT Investor LLC and 101 & Bell Development Partners LLC for the land. Butler Design Group has been tasked as the architect of the park. Kimley-Horn is the civil engineer and Withey Morris Baugh PLC is the land-use attorney for the project. Though MREG said it is in talks with a few “prominent” contractors in the metro, a final selection has not been chosen as of Jan. 11. The leasing team includes brokers from CBRE and Stream Realty Partners, Henig said. MREG received approval from the DRB on Jan. 4 after previously receiving a continuance on the project after a lengthy public comment session with residents. Some of the revisions MREG has made since a December DRB meeting are to the aesthetic of the project, which include modifying sections of the building parapet walls to break up the monotony of the building facades; changing the color of the dock doors from white to a desert tan; screening the warehouses from the public road; and shifting the landscaping plans to add trees along a mixed-use trail within the park to allow for more shade. Next phase in Deer Valley gets going Roughly 15 minutes from the Scottsdale site, MREG is moving ahead on the next phase of its massive, more than 3 million-square-foot industrial park in Deer Valley. MREG purchased the land for the Mack Innovation Park Deer Valley in early 2021 through the state land auction. The site was designated a “supplier site” for Taiwan Semiconductor Manufacturing Co.’s manufacturing facility as it’s located minutes away from TSMC’s $40 billion site in north Phoenix under construction. It started construction on the first phase in August 2022, which comprises 917,000 square feet across seven buildings. Last April, three of New York-based Colgate-Palmolive Co.’s (NYSE: CL) skin-care businesses together signed a lease for 91,350 square feet at the park. The next phase of MREG’s Deer Valley park consists of more than 400,000 square feet across three buildings on 7th Avenue and Pinnacle Peak Road. Construction financing for the new phase earlier this month as MREG commenced site work. The project team includes Graycor Construction Co. as the general contractor and Deutsch Architecture Group as the architect. Stream Realty Partners’ Rusty Kennedy and James Cohn are the listing brokers for the site, according to MREG. There are an additional 115 acres of of land are available to sell or for future speculative or build-to-suit development opportunities for semiconductor suppliers, larger users or customized requirements. Metro Phoenix was ranked No. 1 out of the 15 top growth markets for largest projected job gains by global real estate firm Newmark Group Inc. in its latest manufacturing report, which identified the largest growth markets in large, medium and small metros. Nearly 15,500 jobs have been promised as part of the major manufacturing developments coming to the Valley, which topped the nation for both projected jobs added and manufacturing announcements in excess of $100 million, according to Newmark research.
When fully built out, the Mack Innovation Park will span 1.2 million square feet of industrial and flex office across 11 buildings between Pima and Bell roads, immediately east of the Loop 101 freeway. Getting to the point of build-out has been roughly two years in the works. MREG acquired the land at an Arizona State Land Department auction in March 2022 for $125 million. Several development groups pursued the site at the auction, which had an opening bid of $58.58 million. MREG beat out other bidders such as Baker Development Group, Verde Investments Inc., FCP Fund V REIT Investor LLC and 101 & Bell Development Partners LLC for the land. Butler Design Group has been tasked as the architect of the park. Kimley-Horn is the civil engineer and Withey Morris Baugh PLC is the land-use attorney for the project. Though MREG said it is in talks with a few “prominent” contractors in the metro, a final selection has not been chosen as of Jan. 11. The leasing team includes brokers from CBRE and Stream Realty Partners, Henig said. MREG received approval from the DRB on Jan. 4 after previously receiving a continuance on the project after a lengthy public comment session with residents. Some of the revisions MREG has made since a December DRB meeting are to the aesthetic of the project, which include modifying sections of the building parapet walls to break up the monotony of the building facades; changing the color of the dock doors from white to a desert tan; screening the warehouses from the public road; and shifting the landscaping plans to add trees along a mixed-use trail within the park to allow for more shade. Next phase in Deer Valley gets going Roughly 15 minutes from the Scottsdale site, MREG is moving ahead on the next phase of its massive, more than 3 million-square-foot industrial park in Deer Valley. MREG purchased the land for the Mack Innovation Park Deer Valley in early 2021 through the state land auction. The site was designated a “supplier site” for Taiwan Semiconductor Manufacturing Co.’s manufacturing facility as it’s located minutes away from TSMC’s $40 billion site in north Phoenix under construction. It started construction on the first phase in August 2022, which comprises 917,000 square feet across seven buildings. Last April, three of New York-based Colgate-Palmolive Co.’s (NYSE: CL) skin-care businesses together signed a lease for 91,350 square feet at the park. The next phase of MREG’s Deer Valley park consists of more than 400,000 square feet across three buildings on 7th Avenue and Pinnacle Peak Road. Construction financing for the new phase earlier this month as MREG commenced site work. The project team includes Graycor Construction Co. as the general contractor and Deutsch Architecture Group as the architect. Stream Realty Partners’ Rusty Kennedy and James Cohn are the listing brokers for the site, according to MREG. There are an additional 115 acres of of land are available to sell or for future speculative or build-to-suit development opportunities for semiconductor suppliers, larger users or customized requirements. Metro Phoenix was ranked No. 1 out of the 15 top growth markets for largest projected job gains by global real estate firm Newmark Group Inc. in its latest manufacturing report, which identified the largest growth markets in large, medium and small metros. Nearly 15,500 jobs have been promised as part of the major manufacturing developments coming to the Valley, which topped the nation for both projected jobs added and manufacturing announcements in excess of $100 million, according to Newmark research.