The next tech hub: Downtown Phoenix Warehouse District

Above: ASU's School of Art moved one of its five student galleries to the downtown Phoenix Warehouse District. The converted warehouse space inside the Grant St. Studios offers a revitalized student gallery experience. (Photo by DSQUARED) Real Estate | 11 Oct, 2016 |

More than 100 years ago, Phoenix’s Warehouse District was a bustling area where trains would crisscross the streets, bringing wholesale goods and produce in and out of the region. Then the urban flight of the 1950s and 1960s swept the nation, and Phoenix wound up with a severely empty warehouse district.

For the many building owners in the area, it became cheaper to own dirt than an empty warehouse, so many of the brick-walled sentinels of the past were torn down and replaced with dirt or parking lots.

Fast forward to the 21st Century and the district’s remaining dormant buildings have been undergoing a rejuvenation, with redevelopment revitalizing an area that had been left by the wayside.

Call it a comeback

Warehouse District Council Chair Brian Cassidy says the area started to make this comeback when Chase Field and Talking Stick Resort Arena were built in the 1990s.

In Downtown Phoenix, Cassidy says the Warehouse District has a lot of potential for development.

WebPT, a cloud-based electronic medical record and practice management solution tailored specifically to physical therapists, makes its home in the Warehouse District. WebPT is preparing to move into its third Warehouse District location. (Photo by Mike Mertes, AZ Big Media)

WebPT, a cloud-based electronic medical record and practice management solution tailored specifically to physical therapists, makes its home in the Warehouse District. WebPT is preparing to move into its third Warehouse District location. (Photo by Mike Mertes, AZ Big Media)

“Within the district itself, there are 18 city blocks of either surface parking lots or dirt,” he says. “And in any other major city, these parcels would have been built on many, many years ago.”

Phoenix’s Warehouse District is loosely designated as the region starting on the south side of Jefferson Street to a block south of Grant Street between Seventh Avenue and Seventh Street. The area is dotted with some still-in-use and some abandoned train tracks and large brick buildings with plenty of grit and charm.

Some Phoenicians might think it’s an area best avoided, but they’d be wrong.

In 2004, when Cassidy first built and moved his architecture firm — CCBG Architects Inc.— into its own space in the Warehouse District on the corner of Buchanan and First streets, the area started to see its share of businesses opening up shop.

But the real estate recession struck too soon, leaving CCBG out in the cold.

“It was very quiet,” he says, as they were the only business in a block radius for a long time. Now, well into the economic recovery, Cassidy says the area is starting to gain traction once again.

Placemakers

The Warehouse District isn’t so empty anymore with businesses and entertainment venues starting to move in.

Cassidy has been seeing companies start to move out of the suburban areas in Phoenix and move into Downtown Phoenix. The same goes for restaurants, too. Many popular restauranteurs have been expressing interest in setting up a location in the Warehouse District now that the businesses are starting to come in, Cassidy adds.

One of the latest modern office trends has been the utilization of open spaces. The thinking behind tearing down the walls of your cubicles so you can sit next to your office mates is collaboration-based.

This trend has been growing inside of technology company offices for years. The trend has even extended to include companies that may be renting space next door to your offices.

Local tech luminary Brad Jannenga, co-founder of WebPT, noticed these open-space hubs right out of college when he moved to California to work for various tech companies. Sure, there were the catch-all tech hubs of Silicon Valley, but within the Valley and other cities across the country, Jannenga noticed even more condensed pockets and corridors of tech firms working side-by-side.

Jannenga, who co-founded physical therapy software firm WebPT with his wife, Heidi Jannenga, wants to create one of these tech microcosms right in Downtown Phoenix.

Building a trend

The SaaS Industries president and CEO thinks the Warehouse District is just the right place to make one of those hubs in Phoenix.

WebPT, where Jannenga still sits on its board of directors, is planning to move from its current Warehouse District space — its second in the District — into a 120,000-square-foot warehouse space near Fifth and Grant streets. The renovated facility will house both WebPT and Denver-based tech education firm Galvanize. WebPT will take up enough space to fit 500 employees, while Galvanize will take up the remainder of the space.

Jannenga has also bought two more Warehouse District buildings that aren’t too far from Cassidy’s CCBG offices and WebPT’s space. One of his newly purchased buildings that he’s renovating will be used for SaaS Industries and the other building’s concept is still in the works.

Collaboration and resource sharing can happen much easier when companies work in close proximity, Jannenga says.

You don’t have to look very far in Arizona to see an example of a dense collection of tech and innovative companies working together. ASU SkySong has transformed South Scottsdale, making it one of the biggest hubs of innovation in the state.

Currently, SkySong is home to more than 50 companies and is projected to generate some $32 billion in economic impact in 30 years, according to a recent Greater Phoenix Economic Council report.

Tech trendsetter

There is no question Phoenix as a whole is becoming a tech hub. A CBRE report on Tech Talent ranked Phoenix No. 11, nationally and noted a 58.1 percent growth in tech talent since 2010.

Jannenga says now is the time to move into the warehouse district as more firms start to move in. Galvanize is one of the more recent businesses choosing to set up shop here as it is set to open its new space in the Warehouse District with WebPT in September.

The Warehouse District offers a few unique advantages over Downtown Phoenix proper, Jannenga says. He notes cheaper rents in the Warehouse District than most spaces in Phoenix’s core, which lets the smaller start-ups get in on the community action, he adds.

And the Warehouse District lets firms utilize open and unique spaces while taking up historic parts of Phoenix that would otherwise be torn down.

“What we’ve really been doing, as a community, is pulling together to really save Arizona’s history (in the Warehouse District),” Jannenga says. “They’re these gems just sitting there falling apart.”

And gems they are. Each of the remaining buildings in the District are full of history and charm brick walls, wood ceilings, former employee etchings on the walls from decades ago, and much more.

One longtime business resident and owner, Martijn Pierik of Impress Labs, which recently merged with Seattle-based Duo PR, compares his love of Phoenix’s Warehouse District to his love of the Netherlands, where he grew up.

Pierik grew up in an environment full of historic buildings and seeing business begin to operate in one of Phoenix’s oldest areas is exciting, he says.

Impress shares its office space with Moses Inc., an advertising agency, and Pierik says working in wide open spaces like places in the Warehouse District helps breed creativity and collaboration.

“It’s critical for our type of business to be in an open environment, where collaboration and open inspiration drive whats happening,” he says.

Impress Labs has been in the Warehouse District for a few years and Pierik says his business is not a Class A office user. The history behind each building in the Warehouse District really inspires Pierik and his team, which is critical for a creative-based company.

He notes that since Impress Labs is so close to many other similar businesses, like R&R Partners, an advertising, marketing and public relations firm just down the road from his offices, collaboration is really allowed to grow.

“Creativity isn’t done in a vacuum,” Pierik says. “The more collaboration, the better product you can deliver.”

What’s ahead

Redeveloping in the Warehouse District is not for the faint of heart, Cassidy says, but it is much more fun.

As developers take up the last parcels of land in the Roosevelt Row district, Cassidy doesn’t see much more room for continued development momentum.

“(The Warehouse District) is where the opportunities are going forward,” he says.

One advantage the area has over Roosevelt Row is that the Warehouse District is much closer to the core of Downtown Phoenix than people would assume, Cassidy says.

Cassidy hopes to see the dirt lots and mostly un-needed parking lots get redeveloped into quality buildings, ones that pay respect to the historic area. He’d like to see good urban buildings that aren’t just shiny brass towers that would stick out like a sore thumb.

And he’d like to see housing added, he says, because there are plenty of housing opportunities in the area.

“There’s probably room for several thousand housing units to be built down here and more office space,” he says. “If those two components are in place, you’ll see more restaurants and entertainment venues follow suit.”

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