PHOENIX, AZ — May 30, 2026 — An industrial property with outdoor storage (ISF) at 878 W Illini Street in Phoenix has sold for $2,975,000, reflecting continued investor demand for yard-intensive industrial assets in the South Central submarket south of the Salt River. The investment sale closed on May 11, 2026, at $316.49 per square foot — a price point that underscores the outsized land value embedded in Industrial Outdoor Storage (IOS) properties across the Phoenix metropolitan area.
The transaction was brokered by the Sheehan | Schumacher Industrial Team at Rein & Grossoehme Commercial Real Estate (RGCRE), which provided industrial landlord representation on the deal. The team, led by Patrick Sheehan and Max Schumacher, SIOR, has built one of the Phoenix market's most extensive track records in IOS and yard-centric industrial transactions.
Key Highlights
- Sale Price: $2,975,000
- Price Per Square Foot: $316.49
- Building Size: 9,400 SF
- Land Area: 1.9 acres (approximately 82,764 SF)
- Property Type: ISF — Industrial with Outdoor Storage / Yard
- Transaction Type: Investment sale
- Submarket: South Central, south of the Salt River — Phoenix, AZ
- Close Date: May 11, 2026
Deal Metrics at a Glance
| Metric | Detail |
|---|---|
| Address | 878 W Illini St, Phoenix, AZ |
| Sale Price | $2,975,000 |
| Building SF | 9,400 |
| Land Area | 1.9 acres (~82,764 SF) |
| Price / Building SF | $316.49 |
| Approx. Price / Land SF | ~$35.94 |
| Building-to-Land Ratio | ~11.4% |
| Sale Type | Investment |
| Submarket | SC South of Salt River |
Why the Price Per Square Foot Tells Only Half the Story
At $316.49 per building square foot, the 878 W Illini transaction may appear elevated relative to conventional industrial benchmarks. However, as Max Schumacher, SIOR, noted, ISF properties are fundamentally land plays — and the pricing must be evaluated through that lens.
"When you look at this deal on a per-building-square-foot basis, you're missing the real driver of value," said Schumacher. "This property sits on 1.9 acres with a low building-to-land ratio of roughly 11%. The buyer is acquiring nearly two acres of secured, functional outdoor storage in one of Phoenix's most supply-constrained industrial corridors. That's what investors are paying for."
At approximately $35.94 per land square foot, the transaction aligns with the broader trend of IOS land values appreciating as infill parcels with proper zoning become increasingly scarce throughout metro Phoenix.
South Central Submarket: A Magnet for IOS Investment
The South Central corridor south of the Salt River has emerged as one of Phoenix's most active submarkets for industrial outdoor storage transactions. Its proximity to downtown Phoenix, access to major freight routes, and relatively large parcel sizes have made it a target for investors seeking yield from yard-heavy industrial uses — including construction staging, equipment storage, fleet parking, and building materials distribution.
According to Patrick Sheehan, the submarket's appeal is structural, not speculative. "South Central has always been an industrial backbone for the city. What's changed is that investors and operators now recognize how irreplaceable these IOS parcels are. You simply cannot replicate 1.9-acre fenced yard sites in infill locations — zoning alone makes it nearly impossible."
Market Context
The Phoenix industrial market continues to see robust investor appetite for IOS and yard-centric properties, even as broader industrial vacancy rates have modestly increased following a wave of speculative big-box deliveries. Smaller, land-intensive assets like 878 W Illini occupy a distinct segment of the market where supply is fixed and demand from last-mile logistics, trades contractors, and heavy equipment operators remains persistent. Investment-grade IOS assets in the Phoenix metro area have consistently traded at compressed cap rates relative to historical norms, reflecting both rental growth potential and the scarcity premium attached to entitled outdoor storage land.
About Rein & Grossoehme Commercial Real Estate
Rein & Grossoehme Commercial Real Estate (RGCRE) is a full-service commercial real estate brokerage based in Scottsdale, Arizona. The Sheehan | Schumacher Industrial Team, led by Patrick Sheehan and Max Schumacher, SIOR, specializes in industrial landlord representation across the Phoenix metropolitan area, with deep expertise in Industrial Outdoor Storage (IOS), single-tenant industrial, and multi-tenant flex properties. With over $525 million in total transaction volume, the team ranks among the top industrial brokerage teams in the Phoenix market.