The Downtown submarket saw 122,220 square feet of redeveloped office space delivered in the fourth quarter of 2016, marking the first time new inventory has been added to the submarket since 2010.
Situated in the fast-growing Warehouse District, 515 East Grant Street, a redeveloped warehouse, is currently 100 percent pre-leased and will be the future home for tech start-ups WebPT and Galvanize. Recently, the Warehouse District has been emerging has a viable alternative to Phoenix’s “traditional” tech markets in Tempe and Scottsdale.
“The emergence of the Warehouse District is consistent with market-wide demands we are seeing from tenants wanting collaborative, creative work space,” said JLL Vice President Chris Latvaaho. “Unlike traditional office spaces in Downtown Phoenix that may have limitations, repurposed warehouse space offers opportunities for companies wanting to create their own unique brand in older historic brick and mortar that have been fully restored and modernized to help create that cool and hip work environment through the means of higher ceilings, exposed brick and skylights.”
“The interest in the Warehouse District, not only by office users but retail users, helps improve the entire image of Downtown Phoenix. Many companies locating in the Warehouse District are recruiting Millennials and that generation is interested in true live, work, play environments. Therefore, we can expect that Downtown Phoenix will continue to experience a growth in more amenities like retail.”
An additional 246,174 square feet of new office space is proposed for the Downtown submarket.
More than 2.4 million square feet of new office space was delivered throughout Metro Phoenix in 2016, just shy of the 2.5 million square feet of office space delivered in 2015. Tempe led all submarkets in construction with over 1.2 million square feet of Class A office space delivered at Marina Heights.
About the author
Keeley Byer is a market research analyst for the JLL Phoenix office. With four years of market research experience and eight years of commercial real estate technology experience, he continually tracks and analyzing trends affecting the Phoenix Metro commercial real estate market.