Phoenix, Arizona – CBRE Group, Inc., has negotiated a 26,174-square-foot lease in the downtown Phoenix Warehouse District. Arizona-based Scientific Technologies Corporation, a health technology innovation and services company, will occupy the warehouse-turned-office-space.

Corey Hawley and Jimmy Cornish with CBRE’s Phoenix office negotiated the lease on behalf of the landlord, 1^st Buchanan, LLC. Jim Sadler and Darius Green with Keyser represented Scientific Technologies Corporation.

Located at 411 S. 1^st Street in Phoenix, the space was formerly occupied by Phoenix Packaging Products as a warehouse and distribution site in the mid-1900s. The property is in the process of being converted to creative office space as part of an adaptive reuse project. The two-story building retains original design elements including a wood truss roof, vintage brick walls and ample natural light.

“The downtown Phoenix Warehouse District continues to prove itself as one of the metro’s most attractive locations for tech companies to relocate to,” said Hawley. “We’re happy to see Scientific Technologies Corporation’s vision aligns with the creative, tech-driven nature of the Warehouse District.”

Geoff Jacobs and Randy Grudzinski, principals with Scottsdale-based Aspirant Partners – the manager of 1^st Buchanan, LLC, stated that their firm “sees tremendous opportunity in the revitalization of downtown Phoenix, with 411 S. 1^st Street being one of several development and re-development projects that we are undertaking in this sub-market.”  Aspirant is also the developer of The Stewart — a 19-story, 312 unit apartment building at the NE corner of McKinley Street and Central Avenue in downtown Phoenix.

Scientific Technologies Corporation joins other tech and creative companies including Galvanize, WebPT, R&R Partners and Gould Evans in locating to Phoenix’s amenity-rich Warehouse District. The property is surrounded by roughly 100 restaurants as well as a variety of retailers, art galleries and event and concert venues. Talking Stick Resort Arena, Chase Field and CityScape are all located within a mile of the property.

Established in 1998, Scientific Technologies Corporation advances population health outcomes through information technology, consulting and technical solutions to government agencies and the private sector in the southwest region of the U.S.

Phoenix, Arizona  – CBRE Research has ID’d a trend that’s sure to be good news for office users trying to wiggle their way into the Valley’s prime submarkets.

According the latest Phoenix MarketFlash, more than one million sq. ft. of space – the majority of which is former back-office/flex space – is being renovated. The research brief also points out that a majority of these projects are concentrated in the Tempe and South Airport areas where tenant demand is high but available land for development is scarce.

“Many developers have purchased outdated buildings with the intent to renovate and convert them to dedicated office buildings,” said CBRE’s Corey Hawley. “The Valley has some of the highest office activity we’ve seen in years and currently there is not enough useable space in the market to meet demand.”

Hawley, a first vice president specializing in office properties, says developers in the market for repositioning opportunities are looking for projects in areas with high barriers to entry, with high parking ratios and immediate access to the Valley’s best amenities.

One such property is 411 S. 1^st Street in downtown Phoenix’s Warehouse District. Currently undergoing extensive renovations, the project was formerly a packaging products warehouse. Once renovated, the two-story building will offer users a fully modernized, creative office environment in the highest density employment area in the entire state. The property will allow future tenants access to more than 100 restaurants within a two-mile radius and will put them close to some of the Valley’s most popular entertainment venues – in other words the type of environment future tenants’ employees will love.

Office construction has picked up in recent quarters, which may be leaving some to wonder how the market will deal with an influx of new and renovated product. As comparison to the one million sq. ft. of under-renovation space, the Valley’s office market construction pipeline currently consists of 1.5 million sq. ft.

“Even with the addition of this renovated supply, strong demand for well-located, high-quality space will continue to put downward pressure on vacancy and support rent growth,” said Hawley. “The reality is user demand is high right now, so renovation projects will help boost office supply in the near term.”

Phoenix, Arizona – CBRE has completed the sale of a 175,835-square-feet, class A office building in the Camelback Corridor area of Phoenix. Located at 5090 N. 40^th Street, the building commanded a sale price of $42.6 million, or approximately $242 per square foot.

Jim Fijan and Will Mast with CBRE’s Phoenix office negotiated the transaction. The seller was a joint venture between Lowe Enterprises and J.P Morgan Asset Management of Los Angeles, Calif. The buyer was Vancouver, BC, Canada-based City Office REIT, Inc.

The seller originally purchased the property as part of a portfolio in December 2013. At the time, the property was approximately 50 percent leased. Over the past 3 years, the seller instituted a capital improvement plan, investing millions into the building, as well as an aggressive marketing and leasing program, bringing the property to just over 90 percent leased at time of sale.

“The Camelback Corridor has always been one of the strongest employment corridors in the Valley, and 5090’s tenancy reflects that,” said CBRE’s Fijan. “Currently, the property is home to major corporate employers, including Bar-S-Foods, Kudelski Group and Beyond Trust Software, among others.”

Fijan also points to the submarket’s overall health as a positive indicator for the Valley’s office market.

“The Camelback Corridor has enjoyed a resurgence in 2016.  As one of the top performing submarkets in all of metro Phoenix in terms of net absorption, the Corridor’s class A vacancy rate currently sits at 16.3 percent – a huge improvement from the 21.6 percent of a year ago.”

Located in the heart of the Camelback Corridor, 5090 N. 40^th is strategically located, offering quick, easy access to Arizona Highway 51 and the Loop 202 Freeway. Sky Harbor International Airport is just 6.7 miles away, and Arizona State University is less than 10 miles away.

CBRE’s Jerry Roberts, Corey Hawley and Pat Boyle have been retained to market and lease the property.