A long-quiet office campus along Tempe’s Priest Drive could swap cubicles for loading docks under a new proposal from a California developer. Plans have been filed to scrape the aging buildings at 2750 S. Priest Drive and replace them with large industrial halls geared toward advanced manufacturing and logistics, adding hundreds of thousands of square feet of warehouse and support office space along the busy employment corridor. City officials and nearby residents are now weighing whether the roughly 25-acre site should return to industrial use.
According to the Phoenix Business Journal, the campus at 2750 S. Priest Drive has sat mostly vacant for about 15 years. Reporter Helena Wegner notes that the California-based applicant is seeking Tempe’s blessing to swap out the existing office designation for industrial and advanced-manufacturing uses.
The proposal in detail
Planning documents identify Panattoni Development Company as the group behind the application. The firm is looking to build two single-story industrial structures, each about 46 feet tall, with a combined program totaling several hundred thousand square feet of warehouse and office space. AZBEX reports the plan calls for roughly 354,000 square feet of warehouse, industrial and manufacturing space and about 88,700 square feet of related office. Building 1 is pegged at about 249,900 square feet, while Building 2 is planned at around 198,900 square feet. The proposal leans on existing parking garages and on-site parking courtyards to handle both employee vehicles and truck traffic.
A long-idle campus
Marketing materials show the roughly 25-acre property once served as an operations center for State Farm and is now largely empty, according to a Crexi listing packet. Local planning records and coverage also recall a 2023 push for the IDM Fountainhead multifamily project, a 566-unit proposal that secured a General Plan amendment but never moved forward, leaving the land open for yet another potential reinvention.
Why developers are shifting back to industrial
Brokers say the math has changed. Strong regional demand for logistics, manufacturing and semiconductor-related facilities has turned dated suburban office parks into tempting industrial conversion sites. Recent regional reports show Phoenix carrying a sizable industrial construction pipeline, and national coverage of large semiconductor investments helps explain why advanced manufacturing space is increasingly coveted in metro Arizona.
Industry research adds more context. Lee & Associates market overviews highlight the scale of the industrial pipeline in the Phoenix area, while broader reporting on semiconductor projects and their delays underscores how much support space those plants demand. Coverage by Construction Dive has also detailed the statewide semiconductor buildout and its workforce challenges, including labor shortages and construction timing issues on major projects.
What’s next for the Tempe site
Project documents cited in local coverage show the developer has asked for a minor General Plan amendment along with a reversion of the zoning back to General Industrial. City staff recommended approval, and the application has been routed to the Development Review Commission and to the Tempe City Council for hearings held earlier this year. AZBEX notes those steps include a Development Review Commission check and scheduled council hearings to consider both the rezoning and the development plan review.
Local context and likely impacts
Filing materials indicate a neighborhood meeting was held where the developer presented information and fielded questions. Local coverage to date shows little formal opposition on the record. If the Tempe City Council ultimately signs off, the project could trade quiet office buildings for new industrial jobs and added truck traffic along Priest Drive, although the developer has not yet disclosed a construction timeline or potential tenants while the approvals process continues.
