James Keeley, SIOR, CCIM, founding partner and managing broker at Colliers International’s Scottsdale office recently released a 2030 Report for the Greater Scottsdale Airpark detailing commercial market changes in the past 30 years to the present.
The Greater Scottsdale Airpark has seen continued growth between 1981 and 2014 in the areas of available square footage and number of employees, with the exception of a slight drop in jobs from 2009 to 2011. Businesses moving into the area also steadily increased.
“The large supply of space has been absorbed since 2011, with virtually little to no new construction over the last five years,” wrote Keeley, a senior executive vice president with Colliers. He defines the Greater Scottsdale Airpark as the approximate 3,300 acres bounded by Loop 101 to the north, Thunderbird Road at the south, 64th Street to the west and 90th Street to the east.
In December of last year, office vacancy dropped to 18 percent, compared to the 30 percent vacancy rate that topped out in 2009. Despite a lack of construction, office space remains available.
Industrial, flex and retail use reached an equilibrium in late 2014. The number of buildings for sale is down dramatically, and the price has increased for buildings that become available, according to the report.
In 2014 new residential units were opened or planned. These include Liv North Scottsdale Apartment Community which opened with 240 units, Crescent Communities which began construction on 275 units and Sunrise Commons with 282 units planned to open in 2016. Optima Kierland Center in December 2014 received zoning permission to build a $300 million, 660-unit condo development project.
Last year, businesses in the area added jobs and leased more space accordingly. Keeley noted that Vanguard Mutual Fund Company added 500 employees. Accolade, the Pennsylvania-based healthcare company, announced plans to hire 300-plus employees.
Companies that moved to the Scottsdale Airpark in 2014 include Scottsdale Association of Realtors, Russo & Steel, HomeSmart and South Hills Design Corporation. They purchased or leased spaces ranging from 23,000 square feet to 38,806 square feet.
Keeley’s report averages the prices of land during the past 10 years. The lowest came in 2011 at $13.43 per square foot, while the highest was $37.40 per square foot in 2008. Prices began increasing from 2006 to 2007, at which point the price per square foot hit a high of $25.09. In 2014 land prices settled at $24 per square foot.
The end of 2014 realized 75 new sales for office, industrial and retail spaces with a sales volume of $169,544,000 for 1,433,380 square feet.
“The trend for 2015 is slow but steady absorption of space and a new three-story office building is under construction at the Loop 101 and Bahia Drive,” Keeley said.