For Immediate Release
3/13/2012
Kris Baxter-Ging
City of Tempe
Community Development Marketing Specialist
(480) 858-2059
kris_baxter@tempe.gov
Downtown Tempe high rise space near capacity - new high rise space in demand
High rise space in downtown Tempe is nearly at capacity, creating demand for new development.
· Hayden Ferry Lakeside is at 94 percent occupancy
· Tempe Gateway is approximately 40 percent leased with leads on much of the remaining space
· Papago Gateway Center is 80 percent leased
· Centerpoint on Mill has converted existing second floor retail into office space to take advantage of the market
· Tempe’s vacancy rate for business space is lower than neighboring cities Phoenix and Chandler
· Mill Avenue has added 48 new retail businesses since 2009 that are open and thriving – the vacancy rate has gone from 32.4 percent in April 2009 to 20.5 percent this month
“The time is now to build and we are ready to connect developers who have projects that fit our community with landowners and bankers to continue to improve our city,” said Tempe Mayor Hugh Hallman. “The commercial towers that were constructed in the last development cycle are now nearly full. To continue to prosper as a city, we need to have office space available for the companies that want to make Tempe their home.”
The Mill Avenue and Tempe Town Lake areas that make up downtown Tempe have succeeded in attracting top firms such as Microsoft, KPMG, Limelight Networks and Smith Barney. The area is considered the Valley’s Creative Corridor, with more than 20 marketing, web design, public relations and advertising firms calling the one mile stretch around Mill Avenue and Town Lake their home.
Hayden Ferry Lakeside is home to many of those firms, with new web development company Statera hosting their grand opening on March 29. Xhibit, a digital media company relocating from Michigan, is also in the process of tenant improvements in the building. Silicon Valley Bank is also moving into Hayden Ferry Lakeside.
"After purchasing Hayden Ferry Lakeside I at 51 percent occupancy last June and reaching 94 percent leased in just seven months, we were pleased to expand our investment in Tempe with the purchase of Hayden Ferry Lakeside II in February,” said Matt Mooney, Vice-President and Managing Director of Parkway Properties, Inc. “We consider Hayden Ferry Lakeside to be one of the premier office projects in Greater Phoenix and the leasing activity level speaks to that quality. Tempe is outpacing most of the other submarkets in metro Phoenix in the recovery.”
A media event will be hosted at Hayden Ferry Lakeside at 10 a.m. on Tuesday, March 20. An announcement about a forthcoming development will be made at that time.
Tempe Gateway still has space available, but the interest level in its remaining square footage is very high. Companies at Tempe Gateway include Limelight Networks, Waste Management, TriSports.com and Parsons.
“We’ve been very pleased with our Tempe investment. Our leasing efforts have been highly successful so far and some of the City’s most important businesses have made our building their home,” said Ada Healy of Vulcan Real Estate.
DMB Commercial has about 10,000 square feet of office space available because demand has been strong enough that they have converted second floorspace into office.
Retail in downtown Tempe has seen a huge uptick, with the vacancy rate at the worst of the economy at 32.4 percent to currently 20.5 percent of the same space. Tempe Gateway added 25,000 square feet of retail space for lease this year, with 7,500 square feet of that already leased to TriSports.com.
A photo of downtown Tempe looking south from the Papago Gateway Center building and a chart showing current vacancy rates are attached.
About Tempe, Arizona
Tempe, Arizona is home to Arizona State University, historic Mill Avenue, and Tempe Town Lake. It’s the urban heart of the Greater Phoenix Metropolitan Area, with a population of 161,000, a workforce of 151,000, approximately 200,000 college students and 4 million visitors annually. A smart city, Tempe boasts one of the highest education rates in the state, with nearly 40 percent of the population older than 25 holding a Bachelor’s degree or better. Click a picture for a bigger view.