Tempe officials gave the go-ahead to a developer’s offices-to-industrial redevelopment in a neighborhood where real estate investments are picking up.
Panattoni Development Company won unanimous approval from the Tempe City Council last week for its plans to demolish offices at 2750 South Priest Drive and build two industrial buildings, the Phoenix Business Journal reported.
Irvine, California-based Panattoni plans to build two one-story industrial buildings to replace six office buildings at the 25-acre site.
The two buildings will span 355,000 square feet of warehouse, industrial and manufacturing space. The project will include 89,000 square feet of offices and 373 parking spaces.
State Farm moved out the offices in the early 2010s, and the site has been largely vacant since then.
The office buildings “no longer meet the needs of today’s workforce” and “represent an underuse of a property in a highly visible and employment-intensive area,” Panattoni said.
The firm is looking to attract advanced manufacturing jobs to the development, including in the growing semiconductor industry.
The site was rezoned for mixed-use development in 2023, when IDM Development planned a five-story residential development, though that project never came together.
Investment sales are flowing in the area near the development site.
The fully leased Hohokam Court office building, spanning 70,853 square feet at 2005 West 14th Street, sold last month for $11.7 million.
McCarthy Building Companies bought a vacant DoubleTree by Hilton Hotel at 2100 South Priest Drive last month for $27.5 million with plans to create a 12-acre learning and development center.
Also in January, the 296,700-square-foot Rio West Business Park, at 1621-2021 West Rio Salado Parkway, traded hands for $61.5 million, or $207 per square foot.
Maricopa County Community College District paid $27 million cash last summer for a 189,000-square-foot, two-building office complex at 8530-8550 South Priest Drive that was previously occupied by Target.— Chris Malone Méndez
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