Another office complex in the Phoenix metro area has been earmarked for conversion.
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California-based Panattoni Development Co. bought the former State Farm regional headquarters campus in Tempe for $37.5M, AZ Big Media reported.
The developer gained unanimous approval from the Tempe City Council to redevelop the site into “a state-of-the-art, two-building industrial project” and plans to bring significant electrical infrastructure to the property, according to the report.
The seller was Phoenix-based JDM Partners. Newmark arranged the sale
The 25-acre property is located at Priest and Alameda drives, next to Broadway Industrial Park and near Arizona State University’s main campus. It currently encompasses about 462K SF of office space and two parking garages.
The redevelopment plan reportedly keeps the 858-space parking garages at the southwest corner of the site. The rest of the site will be turned into industrial space.
This sale is one of many office conversions in the Phoenix metro area, with 3.3M SF of obsolete office space across 37 buildings being converted or removed since 2024, according to a recent Cushman & Wakefield report.
Another 4.1M SF of unused office product is currently proposed for conversion or demolition, making Phoenix “one of the most active redevelopment pipelines nationally,” the report states.
The sale of the former State Farm headquarters comes as the metro area continues its reign as the top industrial market in the U.S., according to Colliers. Last year, the state of Arizona drew in more industrial investment dollars than any other state.
The most notable industrial projects in the area so far this year include the continued expansion of the Taiwan Semiconductor Manufacturing Co. campus and the delivery of Phase 1 of Park Algodon, a $250M Class-A industrial and mixed-use development projected to take up 1.3M SF on Loop 101.
In the first quarter this year, the Phoenix industrial market vacancy rate declined to 9.2%, down from 11.2% in Q1 2025, according to a recent Colliers report. That’s the fourth straight quarter of declining vacancy.
