Phoenix's Deer Valley area is buzzing with industrial expansion as developers race to capitalize on the growing demand for space from semiconductor suppliers and other businesses looking to set down roots or expand in North Phoenix. A bevy of heavy-hitter developers such as Mack Real Estate Group, Hopewell, Opus, Ryan Cos., and Sunbelt Investment Holdings Inc. are leading the charge, adding to the area's industrial might with new projects.
About 2 million square feet of industrial space is slated to hit the market this spring, with Skip Corley, executive vice president at DAUM, noting that a solid 60% of this space has already been snatched up through pre-leasing agreements. A strategic location near the Phoenix Deer Valley Airport and proximity to the Taiwan Semiconductor Manufacturing Co. site, currently under construction, seem to be major draws for companies. Amidst this flurry of building and leasing activity, Corley pointed out the typical developer's cautious approach to expansion. "Typically developers don't want to start a second phase until they feel like they've got enough leasing and pre-leasing on the first phase to do that," Corley told the Business Journal.
Deer Valley's current draw isn't only attributed to its strategic location near major highways and the airport. The vacancy rate stands at a TSMC-induced low of about 6.5%, according to Corley in ABC15's report. Big names like USAA, Honeywell Aerospace, Amazon, and FedEx already populate the area, with more companies including Colgate-Palmolive and semiconductor supplier Sunlit Chemical having moved in. And with a land auction set for May over 2,300 acres surrounding TSMC - starting at $56.28 million - the area is poised for an even bigger tech-centric transformation.
A variety of companies are also making long-term commitments in Deer Valley. Bob Lundstedt, another executive vice president for DAUM, highlighted the market's appeal to a mix of merchants, particularly those looking for medium-sized warehouses ranging from 25,000 to 60,000 square feet. "Developers that I know have said, 'we only want to be in two markets — Deer Valley and Tempe, if they can find an infill site," Lundstedt revealed, signaling the submarket's sustained allure. Meanwhile, the likes of Fox Factory Inc. and Danish sports tech firm Trackman Golf have inked deals for significant square footage in the area, evidencing the robust demand for industrial space and its ripple effect on local growth.
Looking beyond the immediate draw of industrial spaces, the Deer Valley Airport itself boasts considerable development potential with about 186 acres ripe for projects. According to airport estimates from 2023, growth opportunities could span from upgrades to infrastructure like new taxiways to the addition of maintenance services and hangars. Ed Faron, Deer Valley Airport manager, indicated the future might even include customs services to accommodate international business needs, especially as TSMC's execs could use DVT for travel.
