Tempe Realty Co.
Realtor Juan Pesqueira
Ryan Cos. U.S. Inc. announced last month that it will build a 10-story office tower on the southern shore of Tempe Town Lake next to two existing office high-rises that house major financial and tech businesses.
The tower, Hayden Ferry Lakeside III, will be constructed on the northeastern corner of Mill Avenue and Rio Salado Parkway. The building’s curving cobalt-blue design will mirror the existing commercial and residential developments on the south side of Town Lake.
With office space virtually full at Hayden Ferry Lakeside I and II, the lake properties that Parkway Properties Inc. recently purchased immediately east of the new project, Tempe officials said Town Lake is a sought-after site for high-profile businesses wanting a prominent setting to showcase their companies.
The existing Hayden Ferry Lakeside buildings’ recent additions include Silicon Valley Bank, which will soon move into one of the high-rises, and Xhibit, a digital-media company relocating from Michigan. Microsoft, KPMG and Smith Barney have offices in the towers.
City leaders and developers hailed the new office tower as a signal that the lingering effects of the recession are over and said more than 900 jobs are expected to be generated by the development.
“We did say in 2008 that we were poised to be the first (city in the Valley) to recover, and we’re seeing that now with this,” Tempe Mayor Hugh Hallman said.
Given the demand for luxury office space in the Valley, Molly Ryan Carson, vice president of Ryan Cos., a national development and construction company with an office in Phoenix, expects Hayden Ferry Lakeside III’s 245,000 square feet to fill quickly. Ryan Cos. is completing the land purchase from Sunbelt Holdings for Hayden Ferry LakesideIII. Construction is expected to start by the end of 2012.
Development could kick off sooner if CBRE leases the building to about 40 to 50percent of capacity, Ryan Carson said, adding that businesses have already contacted CBRE about leasing opportunities.
The new luxury office space will allow Arizona to court prominent national and international businesses seeking a high-profile site in the West or Southwest, Ryan Carson said.
“Throughout the Valley, we are running out of exceptional ClassA office space,” she said. “With this (development), we’re meeting that market. It will help us compete nationally against California, Nevada and other places.”
Several nearby office towers also are prospering. Papago Gateway Center, 260,000 square feet of luxury commercial space at Mill Avenue and Washington Street, is 80percent leased. Tempe Gateway, at Mill and Third Street, houses Limelight Networks,Waste Management, Parsons and TriSports.com, and is about 40percent leased.
Tempe Councilman Mark Mitchell noted that Hayden Ferry LakesideIII will extend to land bordering the Mill Avenue Bridge and the Rio Salado Parkway sidewalk, transforming the northern gateway into downtown Tempe.
“Getting 245,000 square feet filled in downtown is going to help people see why there’s a buzz about Mill Avenue,” he said.
Tempe Community Development Director Chris Anaradian said the effects of the recession have broadened the Valley’s perspective on development and growth.
“It’s not just about building anymore,” he said. “It’s about the 1,000 jobs that will be in that building. That’s a much, much more evolved conversation for Arizona.”
Nancy Hormann, president of the Downtown Tempe Community, which manages the Mill Avenue District for landowners, considers the new high-rise and revitalization of the historical Hayden Flour Mill the boost Mill merchants need.
After years of neglect, Hayden Flour Mill will soon be open for music programming and other events.
“This will finally give us the synergy we needed to connect the lake and the downtown,” Hormann said.