Move over office users, Tempe is also a hot spot for industrial

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Although Tempe is often considered one of the most popular office submarkets in the Valley, it is also a popular destination for small- to medium-sized industrial users who don’t fit into the big box industrial space in the Southwest Valley. Like the tech tenants that have flocked toward the centrally located city, a wave of nutraceutical companies have taken advantage of the Class A and B product that is often unavailable on a smaller scale in the neighboring Airport submarket.

As a result, Tempe currently leads year-to-date absorption outside of the Northwest and Southwest submarkets, even though it has benefited relatively little from build-to-suit absorption gains. The city experienced 240,753 square feet of absorption in the third quarter of 2016, bringing year-to-date absorption to 434,146 square feet.


The city has become a hot spot for industrial users for a variety of reasons. It affords a myriad of enviable benefits to companies that seek easy access to multiple freeways, close proximity to Phoenix Sky Harbor International Airport and Arizona State University, and the ability to draw skilled employees without overburdening their commute times. Last but not least, there are plenty of quality industrial real estate options available in the area. When you couple these area attributes with functional properties, it’s easy to see why so many companies actively pursue Tempe and/or call it home.

Tempe’s existing inventory of available industrial space can accommodate companies large and small, but the lion’s share of businesses typically occupy 7,500-40,000 square feet. Within that bandwidth are a diverse group of users that range from manufacturing, distribution, showroom/retail and a vast array of service providers.

When you consider the sheer size of the entire Phoenix Valley, it is interesting to note that the commuting/driving epicenter of the Valley is 48th Street and University Drive, and Tempe happens to have three industrial parks (Broadway/Hohokam/Sky Harbor) within minutes of that nexus.

As companies strategize how to remain on “center ice” to better serve their customer base and provide quality of life for their workforce, Tempe is often on the top of the list and will continue to be there going forward. Given its location and despite the scarcity of developable land, the Tempe industrial market is well positioned to provide real, lasting value for companies who need to remain centralized and need the ability to tap into a fantastic workforce.

Click here to learn morefrom JLL’s Q3 Phoenix Industrial Insight report.


About the author
Rick Collinscollins-rick-color is a Senior Vice President for the Arizona Industrial group at JLL. With more than 20 years of real estate brokerage experience, he specializes in representing industrial corporate clients to help them improve their leasehold/ownership positions and maximize the function of the spaces they occupy.



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