Deer Valley Industrial Park was built on those small companies that thrived in the multiple construction booms over the years. The contractors, plumbers, electricians, flooring companies, concrete companies, framers, carpenters and on and on all set up shop in the industrial zoned Deer Valley Airpark. Over the last few decades the park has transformed into something more similar to Scottsdale Airpark. Most of the new zoning the city of Phoenix has granted is for Commerce Park and away from the traditional A-1 Light Industrial zoning of the past. With the collapse of the real estate market starting in 2008 many, if not most, of those small construction jobs and companies left the market. Much of the construction boom in 2006 and 2007 was to accommodate those small tenants and buyers. The creation of the industrial condo projects exploded through out the Phoenix market including Deer Valley Airpark. Typically these were for those 1,500 to 3,000 square foot tenants or buyers. Multiple projects were constructed during those prosperous years. And they all did very well, selling or leasing. In 2008 that all stopped. Most of those construction related companies suffered the greatest and either lost their condos or vacated if they were tenants. Many of the builders that got caught in the downturn lost their projects. All but a few the buyers and tenants vanished.
Turn to 2017 and remarkably there are few options left for those types of companies returning to the market. Though much has been built in the last 24 months there are almost no projects that were built for the truly small user. That small company that needs 1,000 to 2,500 is finding it hard to relocate in Deer Valley Airpark. This is the product that is currently truly lacking here in this economic recovery. Those industrial condo projects that thrived in 2006 and 2007 have filled up over time and this is the size that is so hard to find currently. There are only three available units for sale fewer than 2500 square feet today. Most of the available lease space under 2,500 is second generation and the one coming on line soon with lease space available of that size, Desert Gateway II, only has 6 of their 18 units at about 2,500 square feet.
With the return of new development in and around the Deer Valley Airpark comes the restored demand for those small industrial spaces that are sure to start popping up all over the area. There certainly is the need and it should only grow as this recovery continues. The projects with bigger spaces are in place in Deer Valley Airpark now with many new projects completed or close to completion. I expect it will only be a short time before we see developers catch up with the demand we see in the Airpark. In the mean time you should expect limited options and higher rents. Grab it fast if you’re in need now. It’s going to get worse before we see some new construction of the famed Industrial Condo Project again.