Developers start construction on West Valley site originally envisioned for industrial center 20 years ago

Nevada-based Dermody Properties kicked off construction on what will be a historic industrial hub for the small West Valley city of El Mirage about 30 minutes northwest of downtown Phoenix.

The LogistiCenter at Copperwing, valued at $1.5 billion, will feature more than 10 million square feet of speculative space and be developed across 1,000 acres over the next decade.

Dermody and its partners broke ground on the first phase of the project on Wednesday next to the Northwest Valley Family YMCA near the southwest corner of Peoria Avenue and El Mirage Road. The first phase will comprise two buildings totaling 566,602 square feet.

As one of the largest industrial centers in the state, the project will also be a game-changing development for El Mirage, which historically only had land to offer potential employers.

The massive site is also located near the recently improved Northern Parkway, an important connection in the West Valley, Loops 101 and 303 and Luke Air Force Base. Construction on the first phase is expected to be completed by June of 2024.

Pat Feeney, Tyler Vowels and Dan Calihan of CBRE Group Inc. are the leasing brokers for the LogistiCenter at Copperwing, which was named after the Air Force base and copper, one of Arizona's five Cs, along with cattle, cotton, citrus and climate.

The general contractor is Illinois-based FCL Builders and the architect is California-based HPA Architecture. The investment partner on the project is Canada-based Healthcare of Ontario Pension Plan, or HOOPP. U.S. Bank is the construction lender.

20 years in the making

The site, which has been mostly used for farming, was first set up for industrial development in the 2000s by the longtime landowner John F. Long Properties, a prominent Valley developer known for spearheading growth in west Phoenix.

The Long family had owned the site, which was once about 1,400 acres, for several decades. El Mirage City Council approved a planned area development for an employment center in 2000, according to the John F. Long Properties website.

Long's goal was to help protect and create a buffer for Luke Air Force Base by limiting residential development close to the base. Noise contours is why much of the land around the base in Glendale is slated for warehouses near the Loop 303 instead of housing.

For years, the El Mirage site didn't see development aside from a few small projects because infrastructure such as water services and nearby roads were still being installed or developed. Phoenix-based Novo Development LLC worked on the property with John F. Long Properties and helped bring needed infrastructure such as an Epcor Water USA facility to service the area.

Feeney of CBRE, who started marketing the site for sale about 10 years ago, said it also took some time for developers to consider building in this area until a couple years before the Covid-19 pandemic.

He said industrial growth slowly occurred south of Interstate 10 and west to Tolleson but took off in the West Valley after the Loop 303 extension was completed in 2018. This was followed by large industrial projects such as the Sub-Zero, White Claw and Red Bull plants and multiple distribution centers in Goodyear and Glendale.

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"It was a slow progression going up and west, Phoenix has always moved slowly but surely," Feeney said. "Little did they know the market was coming. Now it's been steamrolling to the west and the north."

Why John F. Long Properties sold the site to Dermody

Pat Gallagher, Southwest region partner for Dermody, said they were one of multiple developers that John F. Long Properties was interested in selling to the site to.

"We had a longstanding relationship with some of the Long family and their consultants," Gallagher said. "They approached us to see if we were interested in acquiring it. They had special needs, they really wanted to close in a relatively short period of time. We had the capital to achieve that, so it was a combination between relationship and our strength of capital."

John F. Long Properties had reached out to more than 10 companies to pitch selling the site, but Dermody rose to the top of the list, said Justin Miller, a partner at Novo Development, which is still involved in the industrial park.

Dermody quickly acquired the site at the end of 2021 for $52 million — it was the largest acquisition in the company's history, while the industrial center is its first project in Arizona. Now, the company has started construction after 14 months of working on the site.

"LogistiCenter Copperwing is perfectly located in the middle of the West Valley," Gallagher said. "We feel we're right in the middle of the bull's-eye of where the growth is."

Last year, El Mirage also gave its support to designate about 700 acres of the LogistiCenter at Copperwing as a foreign trade zone magnet site, which significantly reduces property taxes.

New doors open for El Mirage

With this park, El Mirage will be able to attract potential employers with hundreds of new jobs and compete with the nearby fast-growing industrial corridors in Goodyear and Glendale.

Tom Doyle, the economic development manager for El Mirage, said most leads that come from the Greater Phoenix Economic Council or Arizona Commerce Authority are looking for existing buildings to locate in. In the past, he said they were only able to compete for projects by offering build-to-suit opportunities, but many companies look for speculative buildings to save on costs and time.

"These are our first speculative buildings," Doyle said. "With these buildings we'll be able to apply for new leads that are looking for existing buildings or build-to-suit, so we're really thrilled to have an opportunity for those two different types of leads."

Dermody Properties said it will be targeting mostly logistics users looking for modern distribution buildings that will offer 100,000 square feet to more than 1 million square feet spaces. Feeney said that the industrial center is a finalist for a couple of potential build-to-suit opportunities.

Industrial demand, especially in the West Valley, has been robust in recent years and continued into 2023. CBRE Group Inc. research shows that nearly 50 million square feet worth of tenants are looking for space in the Valley. The Phoenix metro has also become the fastest-growing industrial market in North America in part because of demand for buildings 200,000 square feet or more.