PHX Reporter

The expanding "warehouse corridor" around Phoenix continues to grow as more and more companies are looking for alternative ways to distribute their products in and out of the U.S. to cope with expensive shipping costs to ports.

Companies such as  Dick’s Sporting Goods, pet food retailer Chewy and Recreational Equipment Inc. are among the leading businesses to join the growing "logistics hub" along Loop 303, a recent Wall Street Journal (WSJ) release said. Experts say Loop 303 is growing into one of the leading markets for industrial real estate in the country.

"Arizona’s strategic geographic location gives companies access to world markets, trade routes, and a modern transportation infrastructure," Gov. Doug Ducey said in a recent Twitter post. "It’s what makes our state a premier logistics hub."

The so-called warehouse corridor has grown across Loop 303 as an increasing number of businesses have taken advantage of the opportunities to lease the expanding industrial space. The logistical advantages work for both the businesses and the community.

"When you weigh the cost of transportation and trucking, versus the delay of goods coming into the port, it became feasible for retailers to look at putting stuff on a truck and trucking it over to Phoenix, where you have ample space to be able to develop these really big, large logistics facilities,” Nick Parrish, managing director at private-investment firm Cresset Partners LLC, said in the release. Parrish's firm is one of the companies that are developing industrial buildings to be used for warehouse space.

When Loop 303 was completed in 2017, it connected Interstate 10 on Phoenix's west side to Interstate 17 in the north. The loop was completed partly to cope with traffic and serve the residents who have flocked to the area in recent decades, but it also makes life that much easier for companies looking to save on shipping costs and time lags by avoiding coastal ports, especially on the West Coast.

Much of the development in the warehouse corridor has come between Interstate 10 and U.S. 60, the WSJ said. Officials noted that the creation of Loop 303 was key.

“The floodgate opened at that point,” Pat Feeney, executive vice president in CBRE Group's Phoenix office, said in the release. 

Helmut Leibbrandt, senior vice president of supply-chain management and logistics for the Americas at Puma, noted that businesses had considered going through other markets in the Southwest, but the amount of open space and cheaper lease rates give Phoenix an advantage.

“They’re building, growing like mushrooms almost in the Phoenix area,” he said in the release.