The developers of a multibillion-dollar mixed-use district in North Phoenix are securing industrial tenants as early stages of construction on the project get underway.
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The target occupiers for Halo Vista are suppliers for Taiwan Semiconductor Manufacturing Co.’s chip fabrication campus, according to Mack Real Estate Group and McCourt Partners, the developers behind the 2,300-acre project. And they’ve been making some progress.
“We've made deals with 10 suppliers and 2.5 million feet already, but we need to do a lot more,” Richard Mack, CEO and co-founder of Mack Real Estate, said last month at Bisnow’s Industrial and Manufacturing Outlook event in Phoenix.
Dubbed “a city within a city,” the $7B mixed-use district will span about 40M SF with industrial, office, retail, research, healthcare and educational space, as well as hotels and residential units. It is slated to include seven state-of-the-art industrial buildings.
Construction on Halo Vista began in March and is expected to take 15 to 20 years to complete. The development site is adjacent to TSMC’s campus and is designed to support its expansion. TSMC has committed to investing $265B in the U.S. to build out its advanced manufacturing campus, and developers have been flocking to grab sites near its planned expansion.
“Halo Vista is literally a halo of development around the largest industrial greenfield investment in U.S. history by TSMC,” Mack said Sept. 30 during the event at the Embassy Suites Phoenix Biltmore.
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Dirt construction work is underway, and vertical construction is set to begin in the first quarter of next year, Mack said. The development will include roughly 1.5M SF of initial speculative industrial buildings and aims to ultimately include 12 fabrication plants.
Mack said his company is in talks with suppliers in Taiwan, Japan, Korea and Singapore.
“And we're going as far and wide as Silicon Valley, looking for people to team up with us here,” he added.
Mack said he's trying to sell the importance of being close to TSMC's campus.
“We have to make a compelling value proposition to the suppliers to be here,” he said. “It’s not just what the rent is or the cost of the land — it’s the value of proximity, the reduction in travel time, and maybe most importantly, the credibility to deliver.”
TSMC also wants its suppliers and vendors “as close as possible” to the campus, Mack said.
“These factories run 24 hours a day, seven days a week,” he said. “I think there is a tacit belief that being close is going to be valuable to your relationship with TSMC.”
Mack also said the developers must add more residential units to the site’s plans to support the massive influx of people moving to the region to work at TSMC. The TSMC expansion is expected to create 12,000 construction jobs and an additional 12,000 permanent positions, once facilities become operational, according to a Colliers report.
The developers initially planned for up to 9,000 residential units, with a variety of housing options planned across the district.
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“As these suppliers and manufacturers get their factories up and running, we're going to need more residential,” Mack said. “If we can't provide the hospitality and the places for people to live, as well as work, we're going to fail."
Mack said Halo Vista will be a "lifetime project for us," with one fab being completed per year. He added that he expects the mixed-use innovation district to have a long-lasting impact beyond support for TSMC.
“The United States is going through a reindustrialization,” he said. “And we hope to be more than just a support for a large chipmaking factory.”
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