Giant warehouses dot Phoenix desert awaiting imports that never came
[Source: Anton Troianovski, The Wall Street Journal] — Along a 15-mile stretch of desert, amid strip malls and unfinished subdivisions, nearly a dozen giant warehouses sit silent and empty. They are relics of this city’s dream of becoming a national warehouse hub, a vision dashed by plunging imports and a reordering of the nation’s biggest ports. Decisions to site these warehouses were made earlier this decade as Americans were buying so many new cars, televisions and T-shirts that California — the gateway for many Asian imports — was running out of cheap storage space. With cash from pension funds and other investors, developers sought to turn the desert on the city’s west side into a distribution hub, 370 miles from Los Angeles ports.
Today, an empty, half-mile-long warehouse lingers from that vision. The building’s 1.2 million square feet could fit 193 full-size copies of the Statue of Liberty. Its parking lot has room for 292 tractor trailers. But on a recent morning the only signs of life were a security guard’s trailer, golf cart and bicycle. “It’s not a pretty story,” says developer Jonathan Tratt, who has spent more than a year unsuccessfully trying to find a tenant for the building. He is now offering short-term leases in a bid to ride out the recession.
Mr. Tratt’s warehouse is one of 11 storage complexes completed in southwest Phoenix in 2008, with two more set to be finished this year. Those 13 properties combined will have eight million square feet and are now 86% empty, according to brokerage Cushman & Wakefield Inc. The construction boom has driven the industrial vacancy rate in the 47 million-square-foot southwest Phoenix market to over 20%, according to brokerage CB Richard Ellis Group Inc. Most owners of the empty buildings said they aren’t panicking yet. The local market will inevitably absorb the space, they believe. “I’m optimistic the year won’t end as bleak as it started,” Cushman & Wakefield broker Bo Mills said. [Note: Read the full article at Giant warehouses dot Phoenix desert awaiting imports that never came]