Uptick in business activity along Price Corridor
The Arizona Republic
When the economy tanked, business activity largely stalled or stopped along the Price Corridor, a major employment area in Chandler. But a few bright spots appeared, and in the past 30 days, leasing activity has picked up, a broker says.
Within the past 13 months, five hotels opened, Orbital Sciences moved into a big expansion building and progress inched forward in creating a science and technology park on the former Motorola site.
The corridor is dotted with new office buildings that sit vacant, but occupancy could rise, a broker says.
“In the last 30 days, there’s been a significant increase in user activity,” said Mark Krison, senior vice president of CB Richard Ellis.
“We’ve had several industries looking in that marketplace.”
“Those are the four industries swirling in that area right now,” Krison said.
They’re interested in space ranging from 25,000 to 125,000 square feet.
Prospective tenants are corporations, not smaller companies.
“The mom and pops are not feeling the energy now because the banks have got their wings clipped and they can’t get cash,” Krison said.
“They’re in preservation mode. It’s the older, bigger companies that have money . . . and are in the market looking.”
Krison said the economy hit bottom last year.
“We’re starting to claw back a little bit right now,” he said. “There tends to be a nice, fairly recent surge of activity.”
Another optimistic businessman is Spike Lawrence of Tempe-based Lawrence & Geyser, the company that built the mixed-use project Downtown Ocotillo on Queen Creek Road, which struggled at first to find the right tenants. Now, the Living Room, a new wine bar/cafe is drawing crowds.
“We’re riding on the shoulders of the Living Room,” Lawrence said. “It’s doing wonderfully.”
Its popularity has boosted traffic at the restaurants Sauce and the Egg & I.
Downtown Ocotillo will become more populated in July when Carebear Preschool moves there from 1095 W. Queen Creek Road.
Lawrence is in talks with a couple of other restaurants as well.
“Our darkest days are behind us,” he said. “We’re climbing out of the hole.”
Downtown Ocotillo was boosted when Orbital Sciences employees moved into its nearby expansion building, and Lawrence is eager to see more jobs arrive in the corridor.
The space is waiting for employees.
One completed but quiet structure is the new Class A office building Chandler Echelon on the southwestern corner of Price Road and Loop 202.
The four-story, 188,000-square-foot structure faces Price Road, and behind it is a parking garage. Initial plans for Echelon that included retail and another office building are on hold.
“Our first objective is to get leasing started on the first building,” said Michael Deutsch, a member of a family that recently bought Echelon from Lees Mayfield Associates.
Deutsch was surprised at the number of prospective tenants who have looked at Echelon.
“We have had quite a few people come through the building,” he said. “Whether they’ll make deals or if they were just looking, I don’t know.”
Echelon includes Courtyard by Marriott and Fairfield Inn, which opened in October. Three other hotels opened despite the economy because they were in the works when the economy soured. They are the Hilton at Frye and Price roads, and Hampton Inn and Homewood Suites in the Park Place project across the street from Chandler Echelon.
Park Place is a 100-acre parcel on the southeastern corner of Loop 202 and Price Road. It contains more than 200,000 square feet of vacant Class A office space in three new buildings. Healthways is the only office tenant so far, having taken 80,000 square feet.
Park Place was developed by San Diego-based Douglas Allred Company.
David Allred, the company’s executive vice president, is encouraged.
“We continue to get good market activity,” he said.
As the market improves, he plans to build more: 1 million to 1.5 million square feet in up to 10 buildings, some possibly 10 to 12 stories high.
California-based Cyburt Hall owns a 20-acre parcel on the corner, part of Park Place’s 100 acres, but that land is not expected to be developed for a number of years, said Christine Mackay, Chandler’s director of economic development.
In fact, there are several parcels of vacant land along Price Road, and those properties likely won’t be developed until 2014, Mackay said.
Although 2009 was excruciatingly slow, Mackay said the activity she’s seeing this year “gives me hope things are getting back to some semblance of normal.”
She is seeing interest in deals.
“A lot more people are interested in transactions and expanding,” she said. “They’re not just people kicking the tires.”
Among new tenants in the Price Corridor will be those on the 152-acre site vacated by Motorola. In the near future, the City Council will consider rezoning and a development agreement that would pave the way for a science and technology park, which promises to be a corridor gem.