This article originally appeared in the Phoenix Business Journal.
Top voices in the city’s real estate scene acknowledged fears of building office space in the Valley, but they all agreed: Scottsdale bucks the trend.
“If we had cool office in Old Town, it would get taken up quickly. I know everybody’s scared of office over the past few years. But with 90% of CEOs saying, ‘Go back to the office!’ the demand is huge,” said Jonathan Keyser, founder and managing director of Keyser Commercial Real Estate.
Phoenix Business Journal hosted the Scottsdale Growth Summit on Oct. 9 at the Scottsdale Center for the Performing Arts, featuring a panel consisting of Keyser; Scottsdale City Manager Greg Caton; Jason Morris, land use attorney for Withey Morris Baugh PLC; Andy Greenwood, vice president of Macerich, which owns Scottsdale Fashion Mall.
Five years after the genesis of the in-person work exodus during the pandemic, tenants have slowly crept back into Phoenix-area cubicles, but the numbers still aren’t great. CBRE reported on Oct. 8 an office vacancy rate of 21.8% during the third fiscal quarter in the metro. Regardless of the metrics, panelists said companies are champing at the bit to set up shop east of Arizona’s capital.
One of the hottest plots of discussion was the “four acres of dirt” between the Caesars Republic hotel and North Scottsdale Road. Macerich’s Greenwood said it has height, density and usage approval — the land just needs a plan.
“If I were king for a day, I would love to meet up the office demand. I think that you could put 250-500,00 square feet of Class A office space right next to the mall,” he said.
Morris pointed to a massive $42.25 million office redevelopment at 7272 E. Indian School Road from Phoenix-based George Oliver Cos. as another example of the hunt for working hubs among a list of sprouting projects across Scottsdale.
The panelists expressed their love for Old Town, but it was far from the only opportunity zone they described.
“Because of its desirability, we are busy from one end of the city to the other,” Morris said.
Keyser and Morris said the “beachfront property” along Loop 101 is a nest for development, the developer boasting the ASM headquarters and the land use attorney preening electric carmaker Rivian’s proposed facility in Mack Innovation Park.
“It’s equidistant between TSMC and Intel. Everything along that corridor becomes increasingly relevant,” Keyser said.
City Manager Caton suggested developers treat the potential of property in south Scottsdale near Thomas or McDowell roads like the stock market: buy low, sell high.
“They’ll see, potentially, a higher return based on a little more risk,” he said. “I can’t say enough about the southern part transitioning as tremendous opportunities.”