Over $133,000,000 of real estate sales in the Deer Valley Airpark in 2017
It certainly was a stellar year in the Airpark with sales in the industrial, office, retail and land market exceeding $133,000,000. These kinds of numbers are very reminiscent to the early 2000’s. The economic recovery was very evident in this market. Deer Valley Airpark was undoubtedly one of the busiest areas in the metro Phoenix real estate market over the last year.
There were about 55 individual industrial sales ranging from 2,000 to 50,000 square feet with total sales exceeding $56,000,000. The average price was $116 per square foot. If you look at historical industrial deals selling around $60 psf a few short years ago, the recovery is evident in this market. Land sales exceeded $37,000,000 in 2017 with about 34 individual deals. The average price per square foot for land was $10.45 but this includes all types, industrial, retail, office and residential land. Industrial land averaged between $7.00 and $7.50 psf. A decade ago land prices fell to $0.10 to the dollar during the great recession just past. In other words, land that had previously sold at $1 million could be purchased for $100,000. Today that same piece now cost $750,000. We’re not all the way back but we getting close!
Office sales, as always, lagged behind industrial with 9 office sales averaging about $139 per square for about $37,000,000 in sales. While retail sales reached about $3,200,000.
All and all it was a great year for the Deer Valley Airpark commercial real estate market in 2017 with an enormous amount of new construction and plenty of movement of product. Pricing increased 10 percent to 15 percent in sales and leases. Average industrial leases increased to approximately $0.75 psf (NNN) while office averaged $13.50 modified gross.
Looking forward to our 2018 projections, we may actually find our market with a lack of inventory to meet the needs in the airpark. We are projecting continued growth and prosperity in our market this year. 2017 was stellar but 2018 may surpass it and if inventory grows we could look at record growth in 2018 and into 2019.
Currently there is only one industrial building between 8,000 and 20,000 square feet for sale in Scottsdale Airpark and those needing that requirement will start looking in Deer Valley Airpark to relocate. We only have about a half dozen in Deer Valley currently available for sale and only three of those are new construction at SPV Pinnacle Peak II. Scottsdale Airpark is only a short drive and we expect some clients to expand into the Deer Valley Airpark market soon. We expect to be looking at a shortage of inventory in short order as well. We expect a rapid increase in new construction of speck buildings in 2018 and 2019 to keep up with demand. Much of the land purchased in 2017 will be developed quickly.
Deer Valley Airpark is positioned well, physically and economically, for a big year in 2018. The future looks bright.