By Chris Keeley
You would think it’s 2007 all over again with the amount of new construction underway in Deer Valley Airpark. 2007 was the high mark for new development projects historically in Deer Valley. Over 10 million square feet of land alone was sold in 2007 totaling over $120 million invested. There was an increase of 2.5 million square feet of new buildings from 2005 to 2007.
Here are some of the projects that are currently under construction in Deer Valley Airpark market:
Parc Pinnacle – 311,840 sf; cross-dock distribution space
SPV Pinnacle Peak II – 48,000 sf, 4 free-standing Ind. Buildings
Enterprise Deer Valley – 78,000 sf; multi tenant flex space
Desert Gateway – 173,235 sf; multi tenant lease product
1 East Deer Valley – 51,141 sf; multi tenant flex space
Avilla Deer Valley – +/-121,327sf; +/- Residential Rental Units
New Bank at SWC Happy Valley and 19th Ave
New Enterprise Car Rental at SEC of 19th Ave & Parkview Lane
New Brakes Plus on Happy Valley just East of 19th Ave
New AutoZone on Happy Valley just East of 19th Ave
New Patriot Ordinance Factory on NEC of 15th Ave & Victory Lane
This amount of development is close to 1 million square feet currently under construction. The Airpark didn’t see a million square feet built in the five-year period from 2009 to 2014 combined.
Q & A: Ask Chris Keeley
What is the Difference Between a Gross or a Net Lease?
Gross Lease: A type of rent calculation where the rent includes the base rent and all expenses (taxes, insurance and operating expenses). Expense increases each year of the lease will be passed onto the tenant in the form of expense pass through.
Net Lease or often times called a Triple Net Lease (NNN): A type of rent calculation where the rent cost is split up into a Base Rent amount and separate expenses called Triple Net (NNN). Typically, expenses are placed in three categories: taxes, insurance, and operating expenses. The term “triple net,” which is also written “NNN,” means that the tenant pays all expenses as a separate charge. Triple net is a shorthand real estate way of saying that the tenant pays base rent plus 100 percent of all expenses.
EXAMPLE: Rental Property: 25,000 ± square foot building divided into 5,000 ± square foot spaces. Tenant wants to lease 5,000 ± square feet. Landlord 1 quotes $0.90 per square foot gross or $4,500 per month total. Landlord 2 quotes $0.72 per square foot (NNN) or $3,600 per month (base rent) plus their pro-rata share (25 percent) of the total building expenses. $643 per month (building taxes), $120 per month (building insurance), $137 per month (Common area maintenance). Total rent plus nets of $4,500 per month.
Very often the payment to the tenant is the same in either case, and typically Landlord 1 will also require the tenant to pay any increases in net charges after year one.