Description
The subject property is a single story, industrial building consisting of 30,900 rentable square feet, situated on approximately 2.05 acres just west of 40th Street on Air Lane, adjacent to the Sky Harbor International Airport, west of Freeway 143 and east of the Interstate 10.
This offering is 100% occupied by two tenants on triple-net (NNN) lease terms with annual increases. The tenant, Mesa Airlines, has one, three-year lease option with three (3) percent annual increases. The existing lease rate is currently at $11.76 per square foot. According to Mesa Airlines lease, they have the first right of refusal if the Tug space becomes available. This is a benefit to the landlord as downtime, leasing commissions, and tenant improvements will not be a cost upon leasing this space. At the offering price, Air Cargo provides investors with a favorable value at $160.68 per foot and an embedded value in its location on Sky Harbor International Airport. There are eight parcels in this offering: 121-30-007A, 009A, 011, 012, 013, 014, 015, 086.
Adjacent to the western edge of the Airport, The Sky Harbor Industrial Submarket, a 550-acre, mixed-use corporate and industrial center, is easily accessible by air and rail services, Interstates 10 and 17, and local freeway systems. There are 1,193 exiting industrial buildings delivering 46,166,000 of rentable square feet with a low 7.3% vacancy rate. The area owned by the City of Phoenix, was developed to attract domestic and international business. This has helped to heighten the demand and therefore initiate an increase of 532,514 industrial square feet currently under construction in the North Airport area in 2007. And while net absorption has stayed the same in 2007, the average rental rate has been rising since the beginning of 2007 to $0.68 per square foot as well as the average price per square foot to $107.22.
The City of Phoenix promotes a high quality, modern business environment within the Airport area to help withhold the 12,000 people who move to Phoenix each month looking for work. Additionally, 75,800 jobs are expected to be created in the year 2007 alone.