Sierra Ridge Capital Buys Phoenix Industrial Building at 3137 East Elwood Street for $31 Million

Sierra Ridge Capital has acquired 3137 East Elwood Street, a fully leased industrial building in Phoenix, in a $31 million off-market transaction arranged by Newmark, the firm announced Oct. 14. The deal is Sierra Ridge Capital's first investment in Arizona.

The 123,032-square-foot building sits on approximately 9.8 acres in Phoenix's Southbank Business Park. It was fully leased to three tenants at closing, and the sale was completed off-market before a formal marketing process. The price equates to approximately $252 per square foot.

Newmark Team Represents Seller 3137 East Elwood, LLC

Newmark Managing Director Gary Cornish and Associate Nico Burgarello, in collaboration with Executive Managing Directors Barry Gabel, CJ Osbrink and Chris Marchildon, led the assignment on behalf of the seller, 3137 East Elwood, LLC, an Arizona-based private investor and business owner. The buyer is Sierra Ridge Capital, a Los Angeles-based industrial investment and management firm.

The sale completes a full-cycle assignment for the Newmark team, which originally sold the property to the current seller in 2024. That sale followed a bidding process that generated more than 20 tours and over 10 offers. At the time, roughly 37,000 square feet of the building was vacant, and the buyer planned to use space for one of its businesses.

During the approximately two-year hold, ownership completed an office-to-industrial conversion and capital improvement program. Newmark then leased the building to full occupancy before arranging the sale on behalf of the same client.

Property Features and Phoenix Location

Built in 1995 and renovated in 2026, the single-building property has approximately 22-foot clear heights, 10 oversized grade-level loading doors and one truckwell. It also has full HVAC coverage, heavy power capacity, secured yard space and heavy industrial zoning.

The property is in Southbank Business Park, minutes from Phoenix Sky Harbor International Airport. It is directly adjacent to Interstate 10 and near Interstate 17 and State Route 143.

"This sale is a great example of what a well-executed office-to-industrial conversion can deliver," said Cornish. "We had the privilege of selling this building to our client in 2024, and in roughly two years they transformed it into a fully leased, highly functional industrial asset. Sierra Ridge Capital recognized how rare it is to find 100% HVAC space with heavy power, secured yard space and heavy industrial zoning in a central infill location with immediate freeway access."

Sierra Ridge Capital Expands Into Arizona

Nick Angelich, Co-Managing Partner at Sierra Ridge Capital, said the property matches the firm's acquisition focus. "3137 East Elwood is exactly what we are focused on acquiring at Sierra Ridge Capital: a highly functional industrial building in a central infill location where developable land is scarce," Angelich said. "Its power, gated yard and full HVAC meet the needs of traditional distribution, contractor and service users, as well as the advanced manufacturing and technology companies reshaping Phoenix's economy. We appreciate Gary and the Newmark team for delivering a clean, off-market execution, and we are excited to continue growing our presence in Greater Phoenix."

Sierra Ridge Capital is a Los Angeles-based private real estate investment and asset management firm focused on industrial properties in the western U.S. Founded in 2025, the firm invests as a principal alongside institutional, family office and private capital partners and operates assets on behalf of ownership groups. It previously acquired a 113,500-square-foot warehouse in Los Angeles' San Fernando Valley and a four-property, 238,473-square-foot light industrial portfolio in Riverside, California. With the Phoenix purchase, its portfolio totals approximately 475,000 square feet across California and Arizona. The firm said it is actively pursuing additional opportunities throughout Greater Phoenix.

Phoenix Industrial Market Context

The sale comes as Phoenix industrial fundamentals improved in the third quarter of 2026, although the market still carried substantial new supply. CBRE reported industrial vacancy of 9.7%, up 10 basis points during the quarter but down 150 basis points year over year. Net absorption totaled 1.59 million square feet, and average asking rents rose 9% year over year.

Cushman & Wakefield reported overall vacancy of 10.3%, down 300 basis points from a year earlier. Only 9 million square feet was delivered over the preceding 12 months, 68% below the 2022-25 annual average, while net absorption reached 20.5 million square feet. Cushman & Wakefield put average overall NNN asking rents at $1.13 per square foot, with direct rents at $1.16 per square foot. Leasing activity totaled 8.3 million square feet in the third quarter and 23.7 million square feet year to date, the third-highest first three quarters on record.

Kidder Mathews reported 3.4 million square feet of deliveries in the third quarter and approximately 14.0 million square feet under construction. Its total vacancy rate was higher, at 11.5%, reflecting differences in methodology and market coverage among brokerage reports.

By size segment, Cushman & Wakefield reported vacancy of 5.1% for buildings larger than 300,000 square feet. The mid-box segment of 100,000 to 250,000 square feet, which includes the Elwood Street building, had a 19.7% vacancy rate, an improvement of 340 basis points year over year.

Outlook

The transaction illustrates a repositioning strategy in which office space is converted to industrial use and leased up before sale. Sierra Ridge Capital said the building's central location, power, gated yard and full HVAC fit its strategy of acquiring functional industrial assets in supply-constrained markets, and the firm said it intends to continue pursuing opportunities across Greater Phoenix.

Sources

• Newmark press release: Newmark Arranges $31 Million Off-Market Sale of 3137 East Elwood Street in Phoenix to Sierra Ridge Capital