Here’s why developers are buzzing about adding office space in the West Valley

Real Estate | 6 Jul |

Despite the challenges and uncertainties ahead, West Valley economic leaders retain optimism for the future, by looking back in the past. Developers and West Valley city leaders gathered for the Class-A Office Forum sponsored by WESTMARC, Globe Corporation, John F. Long Properties, CBRE and LBA Realty.

The forum, met with collective positive feedback and increased interest, offered a unique platform for investors, developers, and participating West Valley cities.

“It provided a venue to tell a story that not many people may know,” said Ken Chapa, economic development director for the City of Avondale. “In the past, it was easy for investors to ignore that there was anything west of 75th Ave. It can’t be ignored any longer, especially when you see the data and the demographics. The Class-A Office Forum provides compelling real data and opportunities for development.”

In addition to Avondale, representatives from Goodyear, Phoenix and Surprise were also in attendance. During the forum, each city was granted a pitch session to highlight their combined benefits and ready-made Class-A office opportunities.

“For us, it’s about continuing to develop our value proposition and communicating it effectively to investors and end-users,” Chapa said. “The worst compliment you can pay an economic development professional is that their community is a ‘Best kept secret.’”

West Valley buzz

The buzz following the forum has been and continues to be, that not only is West Valley Class-A office space availability no longer a secret, but the perks that come with it are also more clear than ever. As part of a CBRE report delivered by Cathy Teeter, CBRE director of Advisory and Transaction Services for Phoenix, several heat maps displayed robust skilled employment density pools within the West Valley.

Trained and experienced office employees are ready and waiting.

And, best of all, the talent saturated in the West Valley (such as those with technology skills and back-office operations) is embedded along the commute sheds of the 10, 101, 303, 202 and 17 interstates and highways.

“I truly believe when you look at market entry you have to assess both data and information,” said Stephanie Fogelson, vice president of project development for Venn Construction. “When the brokers and developers began to read the data, they were impressed and paused to say ‘hmm.’ That pause in assessment is a great first step but it won’t move the needle; we need to then bring the information of how great these communities are to overlay it with the data.”

And each city did exactly that, expanding on the areas of quality of life, entertainment and recreation opportunities, job availability and more.

In vetting the West Valley’s various assets, the success of existing office spec space was also highlighted including the fact that 67 percent of spec space since 2018 has been leased.

Dynamic demographics

“The employment and demographic data speaks for itself now, and spec office is definitely an area of interest given the West Valley growth. There’s a growing belief among investors, developers and brokers that corporate employers can be pulled out of Scottsdale, Tempe and the East Valley,” said Michael J. Olsen, chief financial officer for Globe Corporation and co-chair of WESTMARC’s Class-A Office subcommittee. “This interest in other Class-A office alternatives has been exacerbated by the escalating office rents and traffic in those competing markets. We have a significant investment in Goodyear and have structured a great public/private partnership with the City of Goodyear on the Civic Square at Estrella Falls (Phase one completion scheduled for June 2022).  Having the City’s commitment to a 125,000 square-foot Class-A city hall and state-of-the-art public library, with a two-acre civic park providing a significant sense of arrival, it was easy to conclude that it’s time for Class-A office in the West Valley.”   

In the short time following the forum, participating cities and WESTMARC received rave reviews, mixed with interest in potential new Class-A office additions. Those who didn’t have an opportunity to attend the last forum are lining up for the next event.

“It was the setup and the way West Valley Communities work together that made the forum a success,” Chapa said. “Economic development is a contact sport and it can get pretty competitive between communities. The West Valley, however, is unlike most other regions—yes we compete for projects against each other, but there is a strong camaraderie as well. That comes through in these types of forums.”

“This was a rapid-fire way to get the data out in front, share the information of these communities’ quality of life, schools, amenities, housing and most importantly, the workforce that will drive the HR departments of the users to fuel their business,’’ Fogelson added. “The cities truly delivered and the packed house of brokers and developers heard a very new message: the West Valley is no longer a sleepy little town, it is jam-packed with a quality workforce who would more than welcome working much closer to their half-a-million-dollar homes.”

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