As we head into the final stretch of summer, investor activity appears to be back in the Valley of the Sun. There needs to be value in order to acquire properties, but investors are actively seeking and finding it in Greater Phoenix. This is particularly true in multifamily, but we are seeing continued interest in industrial and retail as well. Office remains difficult for investors to fully embrace, even with discounted pricing—although the top tier of class A properties has seen a boost in the past year. Owner-occupant deals are active within industrial and multitenant office properties, although levels remain nowhere near what they were a few years ago. Interest rates continue to be a challenge for that segment, and in some cases the math may favor renting versus owning.
One area where it’s becoming more difficult to find value is in the North Valley, and in particular the Deer Valley submarket where significant activity is being driven by the anticipated economic impact of the TSMC and Amkor semiconductor plants and related supporting projects. The Deer Valley industrial market has experienced a clear uptick in both transactional activity and pricing on a per-square-foot basis over the past few years—responding to projected demand with increased competition for improved industrial assets, raw land and office space. Despite rising prices, the increase in sales volume suggests that demand remains strong from both investors and owner-occupants.
Note: The majority of the build-to-suit/industrial land in the Deer Valley area is listed at an undisclosed price. However, those with listed prices are in the $25/SF–$35/SF range.
Seeking CRE Value in Outlying Areas
As with any hot corridor, at some point many operating businesses and investors may find themselves getting priced out of the North Valley market. Already, we are seeing a trend towards businesses looking for alternative, more economically favorable locations, including outlying areas such as:
- Maricopa, where City Council recently approved rezoning for the proposed Maricopa Towne Center project with mix of retail and residential construction.
- Casa Grande, which has seen a surge in economic development in recent years.
- Eloy, where plans for a $33 billion data center would make it the largest such project in the state.
Most of the activity is in land with economic potential, rather than spec building or purchases of existing structures.
Looking to Buy or Sell Land?
Whether you own commercial land that you are looking to sell, or are interested in investment opportunities, the R.O.I. Properties team can negotiate the most favorable deal for you. Please contact us at: [email protected] or 602-319-1326.
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