High-value companies attracted to the Valley’s talent, amenities, and available land—think Garmin, GoDaddy, GM, State Farm, Apple, and others—will lure other big names to office and industrial sectors, says Lee & Associates Arizona research guru Matt DePinto. For one, everyone’s been talking about Tesla, which has Phoenix on the shortlist for a $5B facility to manufacturer the next generation of car batteries. (An exciting prospect to Matt, who tells us he’s a car aficionado… though a reported 6,500 jobs isn’t too shabby, either.) And if Google Fiber chooses the Phoenix area for its ultra-fast fiber optic network, it will further fuel technology companies’ interest, he says. “Both of these would be game-changing.”
On the industrial side, Apple’s decision to locate a component-manufacturing facility could bring a slew of feeder companies, Matt says. But if those smaller companies are looking for smaller multi-tenant properties in the Southeast Valley, they’re finding fewer choices. Likewise, the Southwest Valley is experiencing a dearth in larger floorplates. Even though the market was “one step forward, two steps back,” last year, this lack of space is giving developers enough confidence to go spec, he says. While we’ll likely see negative absorption due to over 2M SF of deliveries by the end of Q1, deals shaping up now will come to fruition next quarter.
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