Dive Brief:
- Outerspace will open a warehouse in Phoenix that will bring 500 jobs to the area and establish a western U.S. presence for the third-party logistics provider, according to a news release last week.
- The 389,000-square-foot facility is slated to open in March, a spokesperson for the company said in an email. It will allow the fulfillment company to offer faster and more affordable shipping for its e-commerce clients by splitting inventory across its four locations in Arizona, New Jersey and Pennsylvania.
- “The bicoastal presence also creates a more eco-friendly and efficient solution for shipping products to the West Coast, rather than airfreighting orders from the East Coast,” the news release said.
Dive Insight:
Outerspace has been focused on growing its footprint to better serve its clients, CEO and co-founder Ricky Choi said in the release. The company, founded in 2019, raised $30 million in a 2022 funding round with the aim of both expanding its warehousing presence and refining its technology product.
"Arizona is the perfect place for our fourth facility location as it presents our brand clients with the convenience to connect with so many neighboring states and metros," Chief Commercial Officer Kate Terry said in the release.
Outerspace joins a growing list of businesses that have established an Arizona warehouse footprint in recent years.
Meal kit company HelloFresh announced it would open a distribution facility in Phoenix in 2021 to strengthen its West Coast presence. Pop culture products seller Funko relocated its main U.S. distribution facility from Washington to Arizona in 2022 due to the state's "strategic location and strong talent pool."
Arizona is also a hotspot for logistics providers. Union Pacific is opening a new intermodal terminal in Phoenix to provide rail service to the San Pedro Bay ports, and the 3PL Saddle Creek Logistics signed an industrial real estate lease in the Phoenix market late last year, according to CBRE.
The Phoenix market has cooled off somewhat as a surge of new distribution space has entered the market. Its vacancy rate in Q4 was 7.4%, its highest since 2019, per CBRE. However, that rate was significantly lower than the 10-year average vacancy rate before the pandemic of 10.4%.
