Kenco Takes Up 642K SF Warehouse Outside Phoenix

Kenco has leased a 641,900 square-foot warehouse west of Phoenix, where the logistics market is booming.

The Tennessee-based logistics firm inked a deal for the industrial building at 440 North 215th Avenue, in Buckeye, about 35 miles from Phoenix, the Phoenix Business Journal reported.

Terms of the deal with landlord EQT Exeter, based in Pennsylvania, were not disclosed.

Kenco was represented in the lease by brokers Barrett Bufkin, William Martin and Eric Walker of Cresa. Brokers Michael Haenel, Andy Markham and Phil Haenel of Cushman & Wakefield represented EQT Exeter.

The renter will use the two-year-old building for warehousing and distribution across the western U.S.

In August, Kenco and a division of British Petroleum won permission to store petroleum products at a 168,000-square-foot facility in Surprise, about 22 miles northwest of Phoenix.

In April, EQT Exeter bought the Buckeye warehouse now known as I-10 Gateway for $60.1 million, or $94 per square foot.

The Southwest Valley’s industrial submarket “is really, really favorable and attracting a lot of high-quality, national tenants,” Scott Guo, investment and leasing officer for EQT Exeter, told the Business Journal.

He said large firms such as Kenco are looking to either relocate from California’s Inland Empire, the heart of the Western U.S. industrial distribution market, or are looking to expand their footprints.

Proximity to California ports was “really important for these guys,” Guo said, while the Buckey warehouse’s direct access to Interstate 10 was a “very, very big competitive advantage when they were weighing other buildings that they could have otherwise leased.”

Across all submarkets, the Southwest Valley outside Phoenix had the most industrial square footage completed or under construction in the fourth quarter, according to CBRE.

Some 87 percent of the 3.2 million square feet of industrial warehouses completed last quarter was in the southwest region. At the same time, 9.7 million square feet were under construction, or 61 percent of the 15.9 million square feet being built across greater Phoenix.

EQT Exeter, founded in 2006 as Exeter Property Group, has more than $30 billion in assets under management, including more than 2,000 properties and 375 million square feet of warehouses, office and life sciences buildings and homes, according to its website.

In early 2021, Swedish private equity manager EQT AB acquired Exeter Property Group and renamed it EQT Exeter, which serves as its real estate arm.

— Dana Bartholomew