As one of the Valley’s hottest municipalities for new commercial growth, Buckeye is expected to experience a medical office building boom as the young-family oriented city continues to grow.
“Talk about an underserved market when it comes to medical office space,” said Andrea Davis, CCIM, Principal of Andrea Davis CRE. “We’re working with a developer (Magnat Group) that understands the demand in Buckeye and this may be one of many. There is a need in this bustling Southwest Valley city for everything from women’s services to pediatrics to imaging to specialty services to outpatient facilities.”
Magnat Group is developing Sundance Medical Center, which will be located at the NWC of Yuma Road and Sundance Parkway in Buckeye. The two-story medical office building will total 43,600 SF.
According to CoStar data, the Southwest Outlying Submarket is one of the smallest in the Valley with roughly 310,000 SF of office space. The vacancy rate has risen moderately over the past 12 months, and at 1.9%, the rate was a touch higher than the long-term average as of 2021 Q4. Interpretation – there is little, if any, inventory to lease or purchase for business owners.
Annual net absorption came in at negative 6,000 SF over the past year. The story improves over a longer period of time. Over the past five years, the submarket has posted net absorption of about 1,300 SF per year, on average. Rents grew by 3.1% over the past year, which is right in line with the impressive decade-long annual average in Southwest Outlying.
There are no supply pressures on vacancy or rent in the near term, according to CoStar with no new product under construction. This lack of construction extends more than 10 years since an office project was delivered in the submarket.
“The type of client we’re seeing demand medical office space in Buckeye seems to be large medical users,” Davis said. “These users are requiring 5,000 square feet to 20,000 square feet versus the average medical user size of 2,500 square feet to 3,000 square feet.”
As the largest Valley city in terms of size – 640 square miles – Buckeye boasts more than 91,000 residents, an 80 percent increase from 2010, according to the city website. The Maricopa Association of Governments predicts Buckeye’s population will balloon to 305,000 residents by 2040.
Recently it landed KORE Power, a lithium-ion battery manufacturer reported to add more than 3,000 well-paying jobs to West Valley. Buckeye also boasts Verrado, an 8,800-acre master-planned community.