Jim Poulin | Phoenix Business Journal
The city of Chandler may be one of the most in-demand areas for companies to expand or relocate — especially technology and semiconductor-related manufacturing firms — in the Valley, but the city is running out of vacant land. Looking ahead during the next 20 years, that means developers will have to be innovative.
Micah Miranda, economic development director for the city of Chandler, said at a recent Business Journal Corridors of Opportunity real estate panel that the city is about 93% to 95% built out with residential, office, industrial and retail developments. While there is a huge demand for companies and residents to be in the East Valley city, he said it is going to have to come from creative sources.
But one thing Miranda doesn’t want to change — and a trend that likely won’t lose traction — is that a lot of businesses want to be in Chandler, starting with the city’s top employer.
For more than 40 years, Chandler has been home to a large Intel Corp. (Nasdaq: INTC) computer chip manufacturing campus that has employed about 12,000 workers. The presence of Intel has led to several companies opening offices and high-tech manufacturing plants nearby — think Microchip, Northrop Grumman and Avnet.
Then in 2021, Intel announced that it would invest $20 billion to build two additional semiconductor fabrication facilities in Chandler.
In the past 12 months following Intel’s announcement, hundreds of thousands of square feet of industrial space in Chandler has been claimed by companies in the semiconductor supply chain.
“The presence that Intel has had over the decades has always been a huge feeder to the tenant base [in Chandler],” said Jackie Orcutt, a senior vice president in CBRE Group Inc.’s Industrial & Logistics group, and one of the real estate event panelists. “But even in the last year alone, I’d say there is probably about half a million square feet of leased product in the Chandler area that can be attributed to ancillary uses that are tied to Intel.”
Companies like DB Schenker, KLK, Edwards and Ingram Micro are all either expanding their existing footprint in Chandler and the Valley or moving here to be part of the growing semiconductor industry, Orcutt said.
The primary areas for these most recent moves and developments are in West Chandler near I-10, the Price Corridor — south of the Loop 202 along Price Road — and near Chandler Municipal Airport. Miranda said there are still some greenfield sites available for development in those areas, but moving forward, Chandler is going to have to take new approaches to have enough space for all of its potential corporate citizens.
“As Chandler approaches build out, we’re really starting to think about the next 20 years of growth in Chandler,” Miranda said. “What does that look like? In a lot of people’s minds, that means verticality and also the repurposing and evolution of existing smaller industrial product.”
Most of the taller buildings and repurposed sites will happen in Uptown Chandler, between Alma School and McQueen roads and south of Guadalupe Road to Ray Road, Miranda said.
The area has already been popular with entrepreneurs who need to operate in smaller spaces than the big players in south and west Chandler. Miranda said a lot of “first-time business owners who are leaving their garage and they only need 5,000 to 10,000 square feet,” are looking at Uptown Chandler.
To encourage more companies to move to that part of town, Miranda said the city is trying to encourage redevelopment there.
“The city is doing a number of things to encourage the redevelopment of smaller parcels and antiquated parcels — in especially in the former big box space,” Miranda said. “We don’t need four corners of retail anymore. We’ve long known that. We’re really aggressive in repositioning two or even just one of those corners at major intersections for new purposes.”
The city would like to see more high-density multifamily developments, as well as medical offices or community amenities like small parks, Miranda said.
Chandler is also already home to a number of large office buildings, but amid the shift to people working from home during the Covid-19 pandemic, Cathy Exeter, a senior vice president of commercial properties for Douglas Allred Co., which has developed several office developments in Chandler, said it has been difficult for her company to see so many offices in the city empty for the past two years.
Major companies in Chandler like Voya, Toyota, Aetna and Northrup Grumman are only use a fraction of their space leased space or have decided to sublease parts of it since many of their employees are still working from home.
“You have these big, beautiful campuses with these state-of-the-art buildings and beautiful amenities, and you’re only seeing it half occupied and the parking lots are a little bit empty. It’s hard to see that,” Exeter said. “You want to see the business that you saw before in the activity. But we think it’s coming back.”
Even though some big tenants with tens of thousands of square feet leased in Chandler aren’t using those spaces right now, Exeter said signs are pointing that they’ll have employees back there soon — with one sign being that the companies aren’t giving up their space.
“We’re finding a lot of our bigger tenants are kind of going, ‘We’re not ready to give back the space. We think we’re going to have our people come back just because we want to feel again like we’re whole.’ So we’re hoping that happens,” Exeter said.
Join us on June 30th, to celebrate Arizona’s tech and innovation ecosystem, our Fire Award honorees and announce the Inno Blazer Award!
The Phoenix Business Journal’s Small Business Awards awards recognize excellence among entrepreneurs and small businesses in Phoenix. Honorees will be selected based on a number of factors, including financial performance, historical achievements, contributions to industry, contributions to the local economy and potential to shape Phoenix’s business community.
Jim Poulin | Phoenix Business Journal