Flexible Private Credit Powers Shopoff's Mesa Industrial Landplay: A Model for High-Growth Logistics Hubs

The $52 million refinancing of Shopoff Realty Investments' 270-acre Block at Elliot in Mesa, Arizona, underscores the growing strategic advantage of private credit in enabling large-scale industrial development. As traditional banks retreat from complex, land-entitlement-heavy projects, lenders like Peachtree Group are stepping in with tailored financing structures that unlock value in high-demand logistics hubs. This deal exemplifies how flexible capital can turn underdeveloped land into a magnet for tenants in booming industries—and why investors should pay close attention to this trend.

The Power of Tailored Financing

Peachtree Group's role in refinancing Shopoff's project highlights the agility of private credit in real estate. Unlike traditional banks, which often require fully stabilized properties or strict pre-leasing terms, Peachtree structured a bridge loan to fund critical early-stage development: grading, utility infrastructure, and street improvements. This allowed Shopoff to advance the project without waiting for full pre-lease commitments—a common hurdle for industrial developers.

The loan's flexibility is critical. The Block at Elliot is a ground-up industrial park on former dairy farmland, requiring extensive entitlements and infrastructure build-out. Traditional lenders might balk at such risks, but Peachtree's experience with land development—paired with its focus on CPACE financing and multi-phase projects—made it an ideal partner.

Market Momentum: Mesa's Industrial Growth Surge

Mesa's industrial market is primed for explosive growth. The submarket's vacancy rate remains below 7%—far lower than Gilbert's 25%—as companies seek logistics hubs near the Phoenix-Mesa Gateway Airport and Loop 202. The Block at Elliot's location at the intersection of E. Elliot Road and S. Sossaman Road positions it as a key node in the Elliot Tech Corridor, a zone attracting tech giants like Meta and Amazon.

This chart would show Mesa's consistently tighter vacancy compared to Gilbert, signaling stronger demand.

Tenants are clamoring for space. CBRE reports over 23 million sq ft of unmet demand in the Phoenix-Mesa Gateway area, with companies prioritizing large-scale, modern facilities. The Block's plan for 12–15 buildings averaging 500,000 sq ft each aligns perfectly with this need.

Operational Efficiency: Turning Land into Leverage

The refinancing's true genius lies in its focus on operational efficiency. By securing capital for infrastructure improvements now, Shopoff can:
1. Accelerate tenant interest: Completed grading and utilities make the site “shovel-ready,” reducing delays for future phases.
2. Attract high-value tenants: The project targets tech, aerospace, and EV logistics firms, which prioritize robust infrastructure and proximity to transportation hubs.
3. Mitigate risk: Private credit's flexibility allows Shopoff to stagger construction based on market conditions, rather than being locked into rigid repayment schedules.

The Role of Private Lenders in Entitlements

Land development projects like The Block at Elliot require navigating complex entitlement processes—securing annexation, zoning approvals, and environmental clearances. Peachtree's partnership with Shopoff signals confidence in the project's execution. The lender's prior work with CPACE and multi-asset classes likely provided insights into risk mitigation and timelines, which traditional lenders might lack.

Investment Implications: A Template for Success

The Block at Elliot model offers a blueprint for capitalizing on underdeveloped land in high-growth markets:
- Private credit fills gaps: Projects requiring upfront infrastructure investment but long-term payoff benefit from lenders like Peachtree.
- Location is destiny: Mesa's logistics advantages—proximity to the airport and major highways—make it a must-watch market for industrial REITs and institutional investors.
- Sector tailwinds: Demand for industrial space in tech and EV supply chains will only grow, favoring large-scale, well-located projects.

This data would show rising prices and transaction volumes, reinforcing Mesa's appeal.

Risks and Considerations

No deal is without risk. Mesa's industrial vacancy could rise if overbuilding occurs in submarkets like Gilbert. Additionally, Shopoff's success hinges on securing tenants in a potentially slowing economy. However, the project's pre-leasing flexibility and Peachtree's risk-sharing structure mitigate these concerns.

Final Take: A Winning Formula

The Block at Elliot refinancing is more than a loan—it's a template for value creation in logistics hubs. Investors should look for similar partnerships between private lenders and developers targeting underdeveloped land in high-growth markets. For Mesa, the combination of strategic location, flexible capital, and sector tailwinds makes this project—and its financing structure—a model worth emulating.

In a world where traditional financing is constrained, the Shopoff-Peachtree deal proves that private credit is the engine of industrial innovation.