Small-bay flex is several tenants, shorter leases, and a higher share of office or showroom than a bulk warehouse. Rollover is the risk. A lender who underwrites it like a 200,000-square-foot logistics box will miss the lease-up of a single 8,000-square-foot bay and will also miss how often those bays turn. BKM Capital Partners, writing about a light-industrial portfolio it bought in metro Phoenix, has reported an Arizona small-bay footprint above 3.7 million square feet. That is BKM describing BKM. They are not presented here as a Capital Market Funds client, and their purchase price is not a comparable we will shop.
The citywide industrial page, including larger Phoenix warehouses, is Phoenix industrial. The state page is Arizona industrial. Orange County buyers who specifically want this bay size have a separate note at Orange County investors. This page is the asset, whoever the sponsor is.
Life company can work when the bays are full and the rollover is staggered. A bank often fits a smaller multi-tenant flex the conduit will not slice. Bridge fits an empty bay plan. CMBS is rarely the first call under 50,000 square feet. We are not a Fannie Mae DUS lender, and Fannie Mae is not the industrial source.
What to send on a multi-tenant bay building
Send the rent roll with suite sizes, lease expirations, and the office-to-warehouse split. A building that is half showroom is not the same as a contractor bay with a small office. Parking and yard, if any, belong in the note because the next tenant may need trucks the current tenant does not.
If one tenant is more than half the income, say so. Concentration changes the lender even when the building is physically small-bay.
Bulk, cold, and yards are other pages
A high-clear logistics building is not flex. A refrigerated plant is not flex. A fenced yard with almost no building is industrial outdoor storage. Those pages exist so this one can stay about bay-by-bay rollover.
No tombstone names a Phoenix small-bay flex asset. The dual-tenant Phoenix industrial card is a different building and stays on the Phoenix industrial page.
Sources for Phoenix bay-by-bay flex
| Source | When it fits |
|---|---|
| Bank | A multi-tenant flex building a portfolio lender will hold bay by bay. |
| Life company | Stabilized small-bay when expirations are staggered and occupancy is already there. |
| Bridge | A lease-up of vacant bays, with the permanent takeout named. |
| Phoenix industrial | The parent page for larger City of Phoenix warehouses. |