The latest company to sign a lease for 1 million square feet in the Valley is Germany-based Puma, one of the world's leading sportswear brands.
The global company signed a 15-year lease in the second quarter for the first building at 303 Crossroads, a 1.7 million-square-foot facility with two industrial buildings fronting the northeast corner of the Loop 303 and Northern Parkway in Glendale.
The company plans to use the building, which will be its first warehouse in Arizona, as a regional distribution facility for its stores and growing e-commerce business. Puma said it plans to bring more than 200 jobs to the area.
The building was developed by Chicago-based Cresset Real Estate Partners, a real estate investment firm, and Clarius Partners, a Chicago-based real estate investment and development management company.
Fred Regnery and Rob Martensen of Colliers International represented the tenant, while Pat Feeney and Daniel Callahan of CBRE Group Inc. represented the building.
The first building at 303 Crossroads, which will total more than 1 million square feet and house Puma's facility, is expected to be completed by the fourth quarter of this year, when Puma will occupy the space.
The building was the second warehouse project completed through the Cresset Real Estate Logistics Fund I, which was created about a year ago and has $250 million in commitments to develop nine warehouses, according to the company, which recently launched another logistics fund.
Dominic DeRose, director of investments for Cresset Real Estate Partners, said Puma signed the lease relatively quickly to accommodate its growth.
"They needed more space," DeRose said. "The timing matched up very well with our delivery schedule and their need, so we're very happy to have the lease signed roughly halfway through construction."
The company started looking for a building in the Phoenix area in the first quarter of this year and had signed a lease for 303 Crossroads by the second quarter, Cresset said. The developer plans to start construction on the second building at 303 Crossroads later this year.
"The tenants are still attracted to Phoenix for a variety of reasons, the population growth, having more products close to people, the general regional growth," DeRose said. "The business environment is very strong, so Phoenix is certainly a targeted market for us and a place where we want to keep investing because of all those factors, particularly in logistics."
Puma designs, develops, sells and markets footwear, apparel and accessories and offers performance and sport-inspired lifestyle products in football, running, basketball, golf and motorsports. Puma Group owns Puma, Cobra Gold and Stichd and distributes products across more than 120 countries. It also has about 16,000 employees worldwide.
In the first quarter of this year, Puma said it had stronger-than expected results due to high demand from retailers and consumers. Puma said its earnings before interest and taxes rose 27% to $208 million, or 196 million euros, in the first three months of this year compared to a forecast of 181 million euros, Reuters reported.
"We are thrilled to collaborate and partner with industry leading tenants, such as Puma, to meet their growing business demands through expansion of their business footprint in the Valley," said Mark Balcius, senior vice president for Clarius Partners, in a statement.
The Phoenix metro was recently named one of the top five industrial markets to watch in the U.S. by Cushman & Wakefield alongside Nashville; Columbus, Ohio; Salt Lake City; and Savannah, Georgia.
The report said Phoenix has emerged as one of the fastest-growing industrial markets with more than 57 million square feet of leasing, or 51 million square feet of absorption, from 2019 to 2021. Developers also completed nearly 40 million square feet of new industrial space over that time, while another 33 million square feet is underway as of Q1 2022.
The metro area's proximity to West Coast markets and ports is an attractive alternative for companies over places like Los Angeles, the report said, adding that rents are less expensive with more space options in the Valley. In the first quarter of this year in Mesa, Lowe's leased 1.2 million square feet and Amazon signed a lease for 1.1 million square feet.