The numbers definitely grab your attention. The West Valley (which is made up of Avondale, Glendale, Goodyear, Peoria, parts of Phoenix and Surprise) has a population of more than 1.7 million people, with an average household income of more than $70,000 per year, well over the Maricopa County average of $57,000. Of those 1.7 million people, 62 percent (or just over 1 million people) are working age. If you need a workforce, it’s there.
The West Valley leads the way in land sales in the market, with just user $2 billion in land sales in 2019.
“These land sales are what is guiding the future,” said Greg Vogel of Land Advisors Organization, who has been brokering deals in the West Valley since 1985. “People are buying this land for a reason, and that is to deploy it.”
As the high volume of land sales might suggest, the West Valley has been leading the state in development of large industrial and data center development and has some of the most successful master-planned communities in the country. The West Valley has entertainment options, easy access to the great outdoors in the White Tank Mountain Regional Park or Lake Pleasant, high-performing schools and even a growing higher education segment. Seemingly, the West Valley has it all going for it.
“What I found in talking to people during my four years in my role at WESTMARC is people say you’re different in the West Valley,” said Sintra Hoffman, president and CEO of WESTMARC, which promotes and advocates for the West Valley. “We’ve been killing it in industrial, you all know that, and that’s great. It’s great to get some of those national companies like Nike, Microsoft, Andersen Windows and more coming into the West Valley.
“But how do we answer the questions for the other 69 percent of the professional workforce that’s leaving every day.”
That’s where the numbers start turning against the West Valley. Nearly 70 percent of the workforce in the West Valley leaves the area for work. These are professionals in healthcare, finance, insurance, high-tech industries and government that commute east towards offices located in other parts of the Valley.
Recently, the cities of the West Valley, with a huge assist from WESTMARC, have been putting on a full-court press, trying to lure developers to bring more Class A office projects to the area. There is little or no available Class A space in the West Valley and precious little in the development pipeline. In the CBRE Phoenix Office Marketview report for Q4 of 2019, there was 2 million square feet of office space under construction, with the West Valley accounting for none of that.
West Valley leaders are working overtime to change that and lure Class A office developers to build in the market and keep some of that workforce close to home.
At a recent, “Why West Valley” event hosted by CBRE and put on by WESTMARC, six city officials each gave short presentations about development-ready sites that are ripe for Class A office products.
Of the three sites highlighted by economic development director Ken Chapa, the most attractive was also the smallest. Avondale is touting a two-acre site on the Avondale City Hall campus, located along Avondale Blvd., just south of Van Buren St.
Chapa pointed out that the lot could accommodate a 40,000 square foot building less than five minutes from I-10 and near the city’s mixed-use entertainment district, The BLVD, which is a 350-acre site that includes another site Avondale is trying to lure a Class A office project. This site is along I-10 and provides high visibility to the freeway. The city is looking to place a 60,000 square foot building on that site.
The third site that Chapa highlighted was the Park 10 Medical Center campus along McDowell Rd., between 107th Ave. and 103rd Ave. The development will be mixed use, but has more than enough space for a 200,000 square foot Class A office building.
“In the past 18 months, we’ve seen about $130 million in capital investments in our community and we’ve announced more than 1,200 new jobs,” Chapa said. “We’ll have more than 7,000 new homes here in the next five to seven years, so if you’re asking, Why Avondale? Why not?”
Economic development director Brian Friedman has been with the city for more than 19 years and has seen the development of the Westgate Entertainment District, which serves as the “Downtown of the West Valley.” He said that property around Westgate is prime for Class A office, something Glendale is well short of. Currently, office vacancy rates in Glendale are 3.7 percent, which is a mind-boggling number for a city of more than a quarter-million people.
“Glendale is a sold out community,” Friedman said, citing the fact that there isn’t a vacant big box retail site or any industrial space over 50,000 square feet available. “The entirety of the marketplace is shifting. There are seven millionaires that own property in and around Westgate. They are there for a reason; because they have some foresight.”
One of those millionaires (better yet, a billionaire) is GoDaddy founder Bob Parsons, who purchased the 76-acre Westgate Entertainment Center in 2018. The city is hoping to attract Class A office development into the district, which would make it more of a true, downtown-type area.
Another site Friedman mentioned was land owned by VanTrust, which is an arm of the Van Tuyl Group, The Glendale Center is located at the Loop 101 and Maryland and is 60 acres which is zoned for office and/or multi-family use. The hope is for office products ranging from 100,000 to 300,000 square feet.
Friedman pointed to the city’s work on the Topgolf site as what officials are able to do when developers come calling in Glendale.
“Topgolf site was a city-owned property. We met, agreed to sell the property, did a development agreement, a purchase sale agreement a one-day design review and we broke ground on the property immediately, completely done with the property transaction in 68 days,” Friedman said.
One of the cities that has a true, Class A speculative office project in the works is Goodyear. The Globe Corporation and the City of Goodyear teamed up on a public-private partnership development at Civic Square at Estrella Falls. It will become the new heart of Goodyear, and will include a new City Hall, new library and park and event space (along with the first parking structure in the city). As part of the development agreement, Globe will build a 100,000 square foot, Class A spec office on the site, which is located just north of McDowell Rd. and east of N. Pebblecreek Pkwy.
“This has been a long dreamed of project for our city,” said Goodyear city manager Julie Arendall. “In fact, 36 years we’ve been talking about creating a site like this. We believe it will be a catalyst for the entire West Valley. We believe if we build it, they will come.”
Arendall also pointed out that the city is looking to attract office developments on 200 acres that run along the south side of the I-10 between Bullard Ave. and Litchfield Rd.
Goodyear also is marketing another site, this one on the north side of the I-10 on Bullard Ave., that is 35 acres and is close to restaurants and hotels.
City of Peoria Economic Development Services Director Rick Buss said his city is working hard to become a world class location for all types of development, Class A office in particular.
“Peoria is going vertical and sustainable, but it’s not just about environmental sustainability, it’s about economic and social sustainability,” Buss said. “We’re driving for quality, economic sustainability that lasts for the long term.”
Buss highlighted some unique sites in Peoria that the city hopes can attract office projects. The first is the Vistancia Commercial Core, located just off the Loop 303 and Lone Mountain Pkwy., right next to Vistancia, a 3,450-acre master-planned community in the north part of Peoria. This site has 320 acres and the city is hoping to attract advanced business services companies, corporate headquarters, high tech firms or a variety of other users.
Stadium Point at P83 is a 17 acre, city-owned site in the P83 Entertainment District, right next to the Peoria Sports Complex. Buss said there was a lot of interest in the concept. The city wants to bring in a public-private partnership to build a vertical mixed use development of over 1 million square feet, which includes Class A office space, a full service hotel, mid-rise residential and of course signature entertainment and dining.
Buss hinted at a project that was in the works, but still in the negotiation phase. He said that the city is negotiating with a group that’s going to build 140,000 square feet of Class A office space, six or seven stories, because they need to expand and want to do it in Peoria.
Christine Mackay, the community and economic developer for the City of Phoenix, said that people often forget that Phoenix is a big part of the West Valley. She touts two exciting sites that the city is focusing its efforts on becoming hubs for Class A office and other projects.
The first area is along the new Loop 202 South Mountain Freeway. Phoenix has more than 1,000 acres in that corridor and is branding the area, near 59th Ave. and Baseline, as the South Mountain Technology Corridor. The city is initially showing a pair of sites, one is 72 acres, the other 70. Mackay said it is for tech related companies, office developments, corporate headquarters or emerging technology companies. She said at ultimate building, the 1,000 acres could result in 50,000 to 80,000 jobs in that corridor.
The second development is the Algodón Center, which is owned by John F. Long. Located both in Phoenix and Avondale, the park bisects Loop 101 and stretches from Thomas Rd. to Campbell Ave., just south of Camelback Rd. Algodón Center will include build-to-suit medical office buildings, as well as Class A corporate office users who want to be close to the highly educated West Valley labor pool.
In its first phase Algodón Center has Algodón Medical Office Park — a retail center, an 80,000 square foot medical office building, and a seven-acre acute care center.
Like Gilbert was once considered a bedroom community, with little or no office or manufacturing and industrial developments, Surprise is on a similar tract. Gilbert now has a very diverse, active office market, helped greatly by the Loop 202 freeway.
Surprise is hoping that the Loop 303 corridor will do the same for its office prospects.
Surprise economic development director Jeanine Jerkovic highlighted one development area, Sterling Grove, where the city is hoping to attract some Class A office development. Sterling Grove is a luxury, master-planned community located between Cactus Rd. and Peoria Ave., on Cotton Lane, just off the Loop 303. When Sterling Grove held their open house in January, more than 5,000 people toured the model homes, which shows the interest is there.
Surprise attracted Ottawa University to locate in its City Center on Bullard Ave. between Bell and Greenway roads and that university has rapidly expanded. In the last 18 months, Ottawa University has invested more than $50 million in buildings on campus, including a new residence hall, and expects to have 3,000 students living on campus in the very near future. Surprise has open lots in the City Center for Class A office development, with ample land surrounding City Center for future growth. Jerkovic pointed out that developers will find, “the most flexible PAD zoning you’ll find anywhere in Arizona. If you want to go up to 15 stories or higher, you can do that at City Center.”