Midyear Spotlight: Let’s Talk about Land

September 4, 2025

Halfway into 2025 is a good time to take stock of where the Greater Phoenix CRE market is and where we might be headed during the remainder of the year. While this blog’s usual focus is navigating shifts in the Phoenix commercial real estate market’s “four main food groups”—office, industrial, retail, and multifamily—this month we will kick off with a discussion of land, because there is a lot going on.

Most of the land deals are selling with a very specific purpose in mind, particularly freeway access. This is certainly the case with the recent Arizona State Land Department auction for the property at Scottsdale Road and the 101. It was a hotly contested acquisition battle, with a developer out of Minnesota ultimately taking the prize. Almost exactly a year ago, we saw a similar dynamic, with New York-based Mack Real Estate Group buying land right around the TSMC complex and I-17 for $56.28 million.

Smaller Land Deals Making Their Mark Outside of Phoenix Metro

Of course, the action is not limited to high-profile deals or within Phoenix proper. For example:

In mid-June, a 17-acre deal at Apache and Yuma roads in the commercial center of Buckeye, with easy access to I-10, sold for $8.9 million.
Earlier in the month, a 107-acre mixed-use property at Peart and Earley Roads in Casa Grande, also close to I-10, sold for $8.2 million.
We are seeing a lot of spec land deals in farther-out areas such as the far West Valley, and even Tonopah and Gila Bend.

“Tweeners,” properties that are priced somewhere between wholesale and retail, tend to be sitting on the market. The properties that are truly in speculative pricing mode—with buyers who are willing to pick up properties and hold on to them for a few years—are moving faster.

The volume of land sales that are happening speaks to long-term optimism for employment growth and economic activity. The one area that is lagging a bit is homebuilders, due to the lack of home sale activity. It’s been a really tough market, and we are not seeing them commit and move forward with transactions, with the exception of some areas in the heart of the employment corridors of the Northeast and Northwest Valley. They will likely remain in uncertainty mode until we start getting decreases in interest rates, with two cuts projected during the remainder of the year.

Midyear Phoenix CRE Sector Review

Office. Leasing in the Camelback corridor continues to be red hot, with landlords quoting high pricing from the mid-$40/SF to in some cases as much as $60/SF. If you aspire to set up shop in that area, get ready to write a big check each month. As a result, we are seeing some tenants—including some law firms with a longtime presence in the Camelback corridor, such as Tiffany & Bosco—moving back to Central Phoenix. Within the Central Avenue corridor, there is a lot more product and volume of space, and far more negotiability from a tenant standpoint. On the deal front, Kellwood Company, a California apparel manufacturer, took advantage of continuing weakness in high-rise multitenant buildings in the Downtown/Central Avenue corridor. Kellwood purchased the 19-story skyscraper at 111 West Monroe at $66/SF, with plans to make it their new headquarters. For perspective, ViaWest had purchased the building at $116/SF in 2017, and the lender took it back in 2023 and listed at $93/SF in 2024. Interestingly, owner-occupant office product is still in very high demand, particularly for buildings under 10,000 SF and within urban core areas. Anything that goes to market tends to be snapped up quickly.
Industrial. Owner-user activity and small industrial product remains in fairly high demand, although it has been impacted by interest rates, the ability to finance, and uncertainties around tariffs and supply chain issues. Meanwhile, investor activity can best be described as stabilized—not really increasing or decreasing. Some very large institutional deals are trading, but smaller private equity deals have been quiet. Much of the product in the far West Valley is starting to be absorbed, which is a positive, given that so much of it was speculative.
Multifamily. Multifamily deals are happening, but there is just not that much product available. Overall, the smaller product that is in good shape and well located is selling—as long as pricing takes into account the discounting from the market peak in early 2022. We are seeing some foreclosure activity within properties that were acquired at market peak.
Retail. The highest demand on the retail side continues to be for smaller retail shopping centers/multi-tenant retail centers. That can be attributed to the fact that retail didn’t experience the price increases during COVID that we saw in multifamily and industrial. It’s only been in the last two years—when it became clear that retail wasn’t actually dead!—that we started to see a bump in pricing. What’s not so hot in the current retail market? Single tenant net lease properties, such as Jack-in-the-Box, Filibertos, or other restaurants with franchise tenants. Higher interest rates have created a situation where fewer deals make sense for investors, and those that do jump in are buying at a higher cap rate and lower pricing.

Looking to Buy or Sell Land in Arizona?

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 our office at: [email protected] or 602-319-1326.