Commercial Real Estate

Tempe: The Land of Plenty

Tempe Developers and Mayor Mark Mitchell

Tempe Developers and Mayor Mark Mitchell

Planning and cooperation has the city in the middle of a multi-use Renaissance

With several major multi-use projects currently in development, the City of Tempe is in the midst of a commercial real estate boom. While it would be easy to heap all the praise for this market resurgence—and the jobs it has brought with it— on Tempe Mayor Mark Mitchell, he would be the first one to spread the gratitude around. ||

“The recent success is not by accident,” says Mitchell, who was elected mayor in 2012 and has served on the City Council since 2000. “This has taken years of dedication and commitment from the council and employees of the city to attract economic development to the city. We’re seeing the investment that we’ve made in our community attract many opportunities.” ||

The city is proving to be a major player when it comes to attracting businesses. Many nationally-recognizable companies already have a presence in Tempe, including LifeLock, KPMG, Bank of America, Edward Jones and Medtronic. Additionally, GoDaddy currently has facilities under construction. ||

“The City of Tempe has done a wonderful job of promoting growth over the past several years,” says Glenn Smigiel, Senior Vice President at CBRE. “Their willingness to work with tenants and developers, demonstrated by a streamlined process for facilitating new projects, has been instrumental in bringing in a wide range of new companies to the market.” ||

Smigiel recently facilitated the $38.5 million sale of Centerpoint on Mill. The 127,027 square-foot mixed-use commercial project on the corner of Mill Avenue and University Drive was created through a unique public-private partnership between the City of Tempe and developer DMB. ||

Rather than draw attention to his tenure as mayor, which has seen Tempe add over 5,000 jobs since July 2012, Mitchell chooses to direct praise at current and former city council members, Tempe citizens, real estate professionals and city staff. Each group, according to Mitchell, continues to play an integral role in promoting Tempe as an economic hub in the Valley. ||

Mitchell points to successful rezoning and redevelopment deals of the past, like Tempe Marketplace and the revitalization of Mill Avenue, as evidence of what smart planning can accomplish. He also emphasizes Tempe’s plethora of qualities that are attractive to businesses, such as its engaged and educated citizenry, central location, proximity to higher education and the willingness of its leadership to work with business leaders to drive economic progress.


Tempe has several major multiuse projects currently in development, including Marina Heights and a third tower at Hayden Ferry Lakeside adjacent to Tempe Town Lake and Liberty Center at Rio Salado. ||

“To date, we have had $1.4 billion invested in and around the lake,” says Mitchell. ||

The Marina Heights project, which already secured State Farm as tenant, accounts for a bulk of that investment. ||

The design of Marina Heights takes its inspiration from the Salt River and the watershed, says Mike Davis, whose firm DAVIS designed the building. “We designed the complex around a

Tempe Mayor Mark Mitchell

Tempe Mayor Mark Mitchell

plaza that takes its cue from the way the water starts up in the mountains and then runs down to provide for agriculture and other things that helped the city develop,” he says. ||

DAVIS designed the building with light colored, reflective glass that will pick up the colors of the sky and fit well into the environment of the area. ||

Each project represents a facet of the city’s vision for development within its boundaries. Included in this vision is a heavy focus on the creation of state-of-the-art multiuse properties that can attract local and national businesses to the city. In order to realize that vision, the city has worked collaboratively with brokers, developers and other partners. ||

“We are honored to be affiliated with the developers who create job opportunities and change the face of our community through innovation,” says Cheri Brady, Vice President National and Commercial Sales for First American Title Insurance Company, who provided many of the title products and escrow services for many of the new projects in Tempe. ||

Hayden Ferry Lakeside, which currently features two completed phases with a third under construction, is operating at nearly max capacity, making the lakefront in Tempe one of the hottest destinations for business. Parkway Properties acquired Hayden Ferry I and II last year. ||

In the seven months following the acquisitions, Parkway nearly doubled the occupancy in Hayden Ferry I and brought Hayden Ferry II to 100 percent occupancy, says Parkway Properties Vice President and Managing Director Matthew Mooney. ||

Mooney attributes this success to Parkway’s proactive management of the property and Tempe’s status as a go-to locale for businesses. “We feel like there is somewhat of a shift happening,” Mooney says. “If you look at the recovery that’s happened here, the numbers are in Tempe’s favor.” ||

Just as ambitious is Liberty Property Trust’s Liberty Center at Rio Salado, which will offer a sustainable, mixed use property on over 100 acres with business, industrial, retail, restaurant and hotel space. The sizable site is being developed, in part, to meet the City of Tempe’s stated need for mixed use space. The demand is there and Liberty Property Trust has developed the site with the needs of the city in mind, according to John DiVall, Senior Vice President and City Manager for Liberty Property Trust’s Arizona region. ||

Mitchell and the City Council have worked with brokers, land developers and businesses to make Tempe an attractive site for economic growth, and the Mayor points to these public-private partnerships as a key factor in promoting that growth. “Whatever the market bears, we are going to figure out how we can work with that,” he says. “Because at the end of the day, it doesn’t do the city any good if those projects aren’t successful. So it’s in everybody’s best interest for us to work together, because our community will benefit from that.”

Just down the road from the lake, another aspect of Tempe’s vibrant economy is spurring real estate growth through public-private partnership. With its sunny weather and central location, Tempe has a chance to further solidify its stance as a prime tourism destination in the Valley. In order to capitalize on this, city leaders have long sought to develop a conference center and attract a top-tier hotel to the downtown area, according to Mitchell. That vision is now coming to fruition with USA Place. ||

Mitchell has a tourism background, having worked in the industry after college, and understands what the industry can mean to a community. “I’m a big believer in tourism,” he says. “The number one industry in our state is technology and the second is tourism.” ||

But the site will function as much more than a conference center and hotel. USA Place will also serve as the national headquarters for USA Basketball, complete with a 4,500 seat arena.||

USA Place fits into a larger vision for the future of Tempe, says Mitchell. By drawing in more out of state visitors through the conference center, hotel and basketball center, Tempe is giving itself a chance to attract more businesses to the city by showing off what a great locale it is. ||

Mitchell points to opportunities for collaboration between the forthcoming conference center and the different colleges at ASU and how that can positively affect the city. “Imagine if there is a conference center and someone from the Biodesign Institute comes for a 1,000 person conference, and we do a quick tour of downtown to show what we have to offer,” he says. “They see that they can open up a regional division for western states in Tempe and it’s easy to fly here because our proximity to the airport is phenomenal.” ||

To support his claims, Mitchell points to the positive effect the Fiesta Bowl had on Tempe in the past. He recalls a game in the 1980s when officials from Chase made the trip to watch the game. The City of Tempe and DMB Associates used the opportunity to show Tempe off to Chase leadership and eventually convinced the company to move into the Centerpoint building on Mill Avenue. The partnership worked out well for the city, bringing about 2,600 jobs and the largest credit processing center west of the Mississippi River, says Mitchell. ||

“Centerpoint on Mill was originally conceived and master planned by DMB in a unique public-private partnership that spanned 28 years and was the impetus for redevelopment of the Mill Avenue District and downtown Tempe,” says Michael Burke, DMB’s Vice President of Development. “DMB’s flexible entitlements and its strong partnership with the City of Tempe allowed Centerpoint on Mill to be responsive to changes in the market and to meet the needs of its retailers and customers.”


The Mayor and City Council have also remained committed to looking at rezoning options for properties when appropriate and when brought up by the property owner. This allows the city to continually revitalize itself by rezoning properties for multiple uses that appeal to modern tenants. ||

This type of infill development is a necessity in Tempe because the city is landlocked and cannot expand outward. Rather than view that as a detriment, however, the city has been proactive in using its unique characteristics to develop unique projects and offer developers multiple options as they develop property. ||

“The one thing about Tempe that is noteworthy to me is it is the only landlocked city,” says Mooney. “As a government, they take a different approach than all of the other cities because they know the one thing they don’t have more of is land. And so they are just much more amenable to urban development and taking a different approach to development than a lot of the other cities, somewhat by necessity.” ||

Rezoning has helped Tempe aggressively pursue technology companies and fashion itself as a hub for the tech industry in Arizona. “Technology is the leading industry in our state,” says Mitchell. “We have the highest percentage of tech-related businesses out of any city in the Valley at over 20 percent.” ||

One promising project aimed at the tech industry is Discovery Business Campus, Wentworth Property Company’s forthcoming state-of-the-art complex near Elliot Road and the Loop 101 Freeway, or what Mitchell dubs “the Price Technology Corridor.” The new project integrates the sites previous owner, Freescale, and allows for further development of vacant lands at the site. ||

The completed plan at Discovery calls for the campus to include facilities for industrial, office, retail and hotel space. With its variety of uses, the site will be a complementary addition to the technology corridor, which already includes the ASU Research Park, the site of the new GoDaddy facility.

In order to house all of the employees that come with the economic boom, Tempe has fostered a progressive multifamily housing atmosphere to provide modern living arrangements for the large amounts of upwardly mobile young professionals the city is attracting from technology and other industries. ||

Companies like GoDaddy, State Farm and Allstate bring jobs to Tempe and, with that, a need for housing. “There is an opportunity here, because it offers something for people who want to live in Tempe but don’t want a house or a mortgage payment,” says Mitchell. ||

With the influx of demand, developers are responding. In addition to properties like USA Place that will feature residential, other communities are popping up around the city. Mark Taylor is currently developing a multifamily offering at Elliot Road and the Interstate 10, near the technology corridor. Additionally, there are already new multifamily offerings in the works for downtown Tempe and near the lake, says Mitchell. ||

There is a another area called Fountainhead Corporate Center near Priest Drive and Broadway Road that was a huge redevelopment area in the past. The property owner is looking at redeveloping that area to include residential units and multifamily, says Mitchell.

The Future
Just like the mayors and councils of the past, the current leaders in Tempe are dedicated to assuring the city has a positive plan for the future. As a father to two daughters, Mitchell hopes to leave them a thriving community with a bright outlook. “I want my daughters to experience what I had in Tempe, but even better,” he says. ||

The city is on the right track. Just a few years ago, Tempe had a $17 million transit fund deficit and had to cut $33 million from its budget, but, due to the work of the councils and mayors overseeing those problems, there is now a $5 million surplus in the transit fund and the city is budgeting smartly. The city’s leadership is now focused on responsible development and growth. ||

In order to make that growth happen, they are making sure to focus on the details that make Tempe an attractive destination for businesses.“All the stuff that is not sexy like infrastructure is important,” Mitchell says. “To attract companies, we need to make sure we have the proper infrastructure in place.” ||

Additionally, the city plans to continue rezoning and redeveloping old sites when appropriate in order to provide room for new businesses to come in and thrive. As an infill community with a finite amount of space to work with, this type of planning is crucial. “We’re going to continue working with redevelopment projects and relying on our staff like we always do to help us think outside the box,” Mitchell says. ||

Tempe is primed to take advantage of its recent economic successes and parlay them into future stability. With multiple high-profile developments set to see completion in the next few years, Tempe has the sound planning and leadership to achieve sustained, positive growth.


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