Tempe Industrial Redevelopment in Play After Panattoni Buy

The former State Farm regional headquarters campus in Tempe is under new ownership.

Panattoni Development Company scooped up the 25-acre property at 2750 South Priest Drive for $37.5 million, AZ Big Media reported. Phoenix-based real estate investment and development firm JDM Partners sold the complex.

The campus consists of roughly 462,000 square feet of offices and contains two parking garages with space for 858 vehicles.

Panattoni already recently received unanimous approval from the Tempe City Council to redevelop the campus into a two-building industrial project once the deal is closed.

Panattoni’s purchase follows “a trend of suburban office being redeveloped into higher and better uses,” Newmark’s Barry Gabel, who represented JDM in the sale, said of the transaction. More than 7 million square feet of offices across the Phoenix region are expected to be redeveloped or converted, Gabel said.

State Farm abandoned the campus in the early 2010s, and the site has been largely vacant since.

Panattoni’s two buildings will span 355,000 square feet of warehouse, industrial and manufacturing space as well as 89,000 square feet of offices and 373 parking spaces. The site was rezoned for mixed-use development in 2023, when IDM Development planned a five-story residential development, though that project never materialized.

Panattoni’s plan keeps one of the parking garages intact. The two buildings will deliver heavy power, allowing Panattoni to bring in advanced manufacturing and other tenants with large power and parking requirements.

The project will rise next to the Broadway Industrial Park in an area filled with similar developments. There’s more than 70 million square feet of industrial and flex space within a 5-mile radius of the site, according to Newmark’s Gary Cornish. Roughly 90 percent of that product was built before the turn of the century.

— Chris Malone Méndez