2014 Office Winners: Scottsdale, Tempe
Scottsdale and Tempe dominated office activity by taking the bulk of the 1M SF of absorption this year. The story wasn't so great for West Valley and Midtown by contrast.
JLL VP Keith Lammersen still sees the Phoenix office market as a tale of two cities: Scottsdale and the Southeast Valley/Tempe with less than 10% vacancies for Class-A space vs the West Valley and Midtown, which still has withering double-digit vacancies and little activity. That's because corporate tenants have bought into and seek the live/work/play environments of Scottsdale and Tempe. It led to 1.6M SF in positive office absorption through the first three quarters of this year. Keith says he sees activity continuing forward with some big requirements out in the market: Blood System's 150k SF RFP, Green Tree Financial's 150k SF RFP and a 100k SF back office requirement for The Home Depot.
Case in point: Keith recently helped Regional Acceptance Corp in a 40k SF lease at Papago Technology Center. The company, which is in the heart of Phoenix's tech row, will add 300 employees to the area. CBRE's Bryan Taute, who repped the landlord, says Regional Acceptance picked Tempe "to easily attract new employees."