Scottsdale Airpark’s annual progress stalled by economic slowdown

Posted By Mike Padgett

Dec. 8, 2008

For the first time in nearly 20 years, vacancies are at a record high and jobs are down in one of Arizona’s largest commercial, office and employment centers, according to a new annual report.

The stalled national and local economies are to blame for the Scottsdale Airpark’s downturn, which is expected to last well into 2009, according to the Greater Scottsdale Airpark 2010 Report. Jim Keeley, founding partner of Colliers International’s Scottsdale Office, has been compiling the annual report since 1989.

The Airpark’s vacancy rate for December is more than 15 percent, the highest rate since its 17.2 percent vacancy total was reported in 1989, according to Keeley’s calculations. His records show that the vacancy rate was 12.9 percent in 2007 and 9.7 percent in 2006.

Keeley says that as of this month, most construction in the Airpark has stopped and that there are indications of a job loss among the more than 2,800 companies in the Airpark. His report shows that there an estimated 52,000 jobs in the Airpark, down slightly from 52,500 in 2007. He says that “it is hard to get a handle on the numbers this year due to the rapid change in employment in the last three months.”

Keeley released his newest Airpark report Dec. 5 to about 180 developers, investors, landlords, tenants, financial institutions, government officials and others.

For 2009, Keeley says he expects “a slight decrease in employees due to current economic conditions.” He also anticipates “very little” new construction to start, and redevelopment of existing buildings will remain on hold.

One of the few major developments under way in the Airpark is Scottsdale Quarter, a 600,000-square-foot retail and office project under construction at the southeast corner of Scottsdale Road and Greenway-Hayden Loop. The new development’s first phase, with 260,000 square feet, is scheduled to open in spring 2009.

Scottsdale Quarter’s developers are Glimcher Realty Trust, Vanguard City Home and The Wolff Co. In an October announcement, Glimcher said the tenants in phase one will include:

• Williams-Sonoma Home, offering home furnishings and gourmet cookware.

• Oakville Grocery, a gourmet grocery.

• Hennes & Mauritz-H&M, a Swedish clothing company offering modern basics to new trends in men’s, women’s, teens’ and children’s fashions.

• Brio Tuscan Grille, an Italian restaurant with wood-fired cuisine.

• Cameron’s Steakhouse, owned by Ruth’s Chris Steakhouse.

• Martini Park, a martini bar.

• Parc, with boutique dining and lounge.

Other national retailers are expected to announce their leases during phase one. Glimcher is a real estate investment trust. Scottsdale Quarter’s planned hotel and residential components will be developed by Vanguard City Home and The Wolff Co.

The Greater Scottsdale Airpark boundaries are generally the Loop 101 on the north, Thunderbird Road on the south, 64th Street on the west, and 96th Street between Bell Road and the Central Arizona Project canal on the east. The Airpark consists of about 3,100 acres, of which 2,950 acres are developed, and 28.5 million square feet of buildings.

For the complete Airpark report, as well as other news about metro Phoenix, visit www.colliers.com/phoenix.

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Dec 8th, 2008

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