Office of Economic Development EDAB Approved Meeting Minutes 11-04-2025

City of Mesa — City Council Study Session (2026-03-26)

Extracted text (via pymupdf) 40234 characters

ECONOMIC DEVELOPMENT
ADVISORY BOARD MINUTES
November 4, 2025
The Economic Development Advisory Board of the City of Mesa met in the boardroom at 120 North Center Street,
on November 4, 2025, at 7:30 a.m.
BOARDMEMBERS PRESENT
BOARDMEMBERS ABSENT
STAFF PRESENT
Kurt D. Ferstl
Michelle Genereux
Charles Gregory*
Anthony Ruiz*
Frank Sanders
Andrew Schreiner
Susan Stephensen
J. Steven Beck (excused)

Jaye O’Donnell
Amanda Elliott
Maribeth Smith
Rob Stirling

EX-OFFICIO MEMBERS PRESENT
EX-OFFICIO MEMBERS ABSENT
GUESTS
Mark Freeman, Mayor
Scott Butler, City Manager
Richard Blake*
Sonny Cave
Mark Drayna
Natascha Ovando-Karadsheh
Sally Harrison (excused)

Andrew Cheney
Michelle Gulick

(*Participated in the meeting via video conference equipment)

1.
Call meeting to order.

Chair Michelle Genereux called the meeting to order at 7:30 a.m.

Chair Genereux excused Board member Susan Stephensen from the beginning of the meeting. She arrived
at 7:32 a.m.

2.
Items from Citizens Present.

There were no items from citizens present.

3.
Approval of minutes from the October 7, 2025, Economic Development Advisory Board meeting.

It was moved by Board member Frank Sanders, seconded by Vice Chair Kurt Ferstl, that the October 7,
2025, Economic Development Advisory Board meeting minutes be approved.

Upon tabulation of votes, it showed:

AYES – Ferstl-Genereux-Gregory-Ruiz-Sanders-Schreiner

NAYS – None

ABSENT – Beck-Stephensen

Chair Genereux declared the motion carried unanimously.

Economic Development Advisory Board
November 4, 2025
Page 2

4.
Hear an office market update presentation, followed by a discussion.
Andrew Cheney, principal with the Coppola-Cheney Team of Lee & Associates, presented an update on the
metropolitan office market. He reported that the previous year reflected the worst net absorption on
record, totaling approximately negative 2.1 million square feet. Year-to-date performance showed 500,000
square feet of positive absorption, largely driven by new development in the north Phoenix submarket.
He noted that rents remained elevated, which continued to justify new construction costs, with most new
builds being owner-user projects. Metro-wide vacancy rates measured approximately 19.5%, with Mesa’s
vacancy slightly higher, including sub-lease space, at 24%. Mr. Cheney anticipated that vacancy would
hover in the low-20% range for an extended period.

Mesa’s downtown area recorded approximately 35,000 square feet of negative absorption, though its
12.5% vacancy rate remained below the metro average. He reviewed recent sales examples, noting that
older office buildings trended at approximately $70 per square foot, stating that pricing had declined since
2022 and was now below replacement cost. Mr. Cheney reported that many professional firms, including
law firms and technology companies, continued to downsize due to remote-work preferences. Owners
seeking to stay competitive were investing in amenity upgrades, lobby renovations, and delivering move-
in-ready spec suites. Some owners were converting older office properties to industrial use, depending on
product type, functional obsolescence, and location. Buildings approaching 30 years of age or older were
most likely to face demolition or repurposing, often based on aesthetics more than structural issues. (See
pages 1-10 in Attachment 1)

A sublease update showed that sublease availability rose from 2 million square feet at the start of COVID-
19 to a peak of 7 million square feet, with some absorption occurring since then. Current sublease
availability stood at approximately 5 million square feet (roughly 2.5× pre-pandemic levels).
Mesa’s east and downtown submarkets had no meaningful sublease inventory. Recent Mesa transactions
reflected office rents in the low to mid-$20s for dated buildings. (See pages 11-50 in Attachment 1)

Mr. Cheney reported that properties with strong amenity packages leased first, while less-amenitized
“island” office buildings lagged. He explained that no consistent multiplier existed for mixed-use adjacency,
but proximity to retail and lifestyle features strongly influenced tenant decisions. He noted that younger
workers often preferred remote work, but short commutes, curated environments, and turnkey spec suites
helped attract employees back to the workplace. (See pages 51-69 in Attachment 1)

Mr. Cheney shared updates on specific Mesa projects including:
•
Union (Built-to-Suit Project) – Currently touring prospective tenants. Although site is somewhat
isolated from amenities, comparable buildings in Tempe had leased successfully.
•
Waypoint / Kimley-Horn Building – This development is fully leased since a major tenant recently
chose to renew. Rents remained lower in older product but were considered stable.
•
Mesa Grove (East of Fiesta District) – A 70,000-square-foot plug-and-play opportunity initially
marketed for industrial use; back-office groups had recently shown interest.
•
Gateway 202 – North Site (12 acres) – Site positioned for employment uses.

Economic Development Advisory Board
November 4, 2025
Page 3

Mr. Cheney summarized that few large users were currently active and that tenants were not yet done
giving back space. Class A owners were continuing to invest in amenities and spec suites. Some distress
existed in the market, but Mesa experienced less distress than other submarkets. (See pages 70-83 in
Attachment 1)

Mayor Mark Freeman asked what actions Mesa could take to improve underperforming office areas,
reiterating that industrial development brought jobs to Mesa and that Mesa’s housing supply remained
affordable relative to the Valley. Mr. Cheney recommended that Mesa highlight strong demographics,
schools, and workforce quality as well as amplify the Union and Waypoint developments.

Board member Natascha Ovando-Karadsheh noted Mesa’s historical lack of Class A inventory and asked
where new commercial development should concentrate. Mr. Cheney suggested preventing tenant out-
migration by developing clusters of 30–50K square foot spec-suite-ready buildings along the US-60 and
Fiesta District and expanding quality office and retail pockets, such as the Stapley Center. He shared that
Mesa’s distance from central Phoenix remained a leasing challenge, so he emphasized the importance of
creating high-quality experiences to offset this.

Jaye O’Donnell, economic development director, discussed opportunities to re-envision the Union site
consistent with a “live-work-play” model. Mr. Cheney agreed that many positive conditions already existed
and encouraged the City to amplify its messaging.

Chair Genereux thanked Mr. Cheney for the presentation.

5.
Hear a presentation from First Things First on business community engagement to support early learning
and childcare in Arizona, followed by a discussion.
Melinda Gulick, CEO of First Things First, presented on the importance of early childhood education and
childcare in Arizona, emphasizing its long-term benefits for the state's sustainability and growth. First
Things First is Arizona’s early childhood agency which is committed to healthy development and learning
from birth to age 5. It was created by voters in 2006 and funded by tobacco tax. Their three focus areas
are quality childcare, strengthening families, and preventative health. She shared that 90% of brain growth
happens in the first 5 years. (See pages 1-2 in Attachment 2)

Ms. Gulick presented data on childcare accessibility and affordability challenges in Arizona, highlighting
that 60% of children live in dual-income households, with childcare costs exceeding 30% of family income.
She emphasized that 30% of income toward childcare was far above the 7% level typically considered
affordable and that this exceeded the cost of many college educations. She asserted that such conditions
were not economically sustainable. The economic impact of these issues was discussed, noting that
families lose $3 billion annually in earnings and job search expenses, while employers and the state lose
$958 million and $725 million respectively. Successful Arizona community-based solutions were
highlighted in Pima County and Tempe, emphasizing the importance of quality childcare for workforce
retention. Ms. Gulick highlighted the economic impact of First Things First, and mentioned ongoing
initiatives to increase funding, including efforts to close a loophole in tobacco tax products. (See pages 3-
11 in Attachment 2)

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November 4, 2025
Page 4

Board member Sonny Cave commented that the CHIPS Act included conditions for on-site or near-site
childcare and inquired what other funding opportunities might be available. Ms. Gulick replied that
childcare was seen as a critical part of the CHIPS Act although funding has stalled. She added that the
Department of Economic Security was recently allocated $45M to support childcare subsidies, which held
off the waitlist by one month, though 9,000 families remained on the waitlist.

Board member Ovando-Karadsheh inquired about educating parents on the importance of early learning.
Jackie Grainger, chief of marketing at First Things First, outlined efforts to educate parents through social
media channels, YouTube Shorts, an online parent kit, and increased outreach to Spanish-speaking
families. Ms. Gulick also noted a partnership with Candelen for the Family, Friend, and Neighbor (FFN)
program, offering training on early childhood interaction skills and kindergarten readiness. Ms. Gulick
highlighted Mesa’s strong early childhood ecosystem through Mesa’s Family Resource Center and the
opening of the Bezos Academy, a free Montessori-based Pre-K, as evidence of both need and community
commitment.

Ms. O’Donnell raised concerns about the lack of childcare spots and rising lease rates for childcare
providers, leading to potential business closures. She committed to following up with Ms. Gulick and Sarah
Tolar, City of Mesa education and workforce administrator, to explore support options and report back to
the Board.

Board member Frank Sanders inquired if underutilized school buildings could be an option to offset facility
costs. Ms. Gulick responded that some communities were doing so, though the greatest childcare shortage
statewide was in the infant to age 2 range, which required specialized spaces.

In closing, Ms. Gulick encouraged employers to connect through First Things First Child Care Solutions for
Businesses page to find resources to support employees, calculate the financial impact this shortage had
on their business, connect with First Things First to learn about community-based solutions, and advocate
for more public support. (See pages 12-13 in Attachment 2)

Chair Genereux thanked Ms. Gulick for the presentation and commitment to the community.

6.
Economic Development Director’s current events summary including conferences attended.
Director O’Donnell highlighted upcoming ribbon cuttings and groundbreakings including KTR (Kids that
Rip) at Cannon Beach - the ultimate indoor action sports playground, Miniso located in the Mekong Plaza
expansion, the FlightSafety International groundbreaking, and the XNRGY ribbon cutting.

Ms. O’Donnell commented on a recent international sales mission to SEMICON Taiwan with the Arizona
Commerce Authority (ACA). The delegation visited the TSMC Newcomer Training Center, which opened in
2021, and trained 56,000 individuals over the past four years. The delegation also provided community
pitches to Taiwanese companies and spoke about the differences in building and operating in Arizona
versus Taiwan. Wednesday through Friday the delegation attended SEMICON Taiwan. There were 1,200
exhibitors. China Airlines and Starlux announced direct flights between Taiwan and Phoenix beginning in
December and January, respectively. The Office of Economic Development was working with the ACA on

Economic Development Advisory Board
November 4, 2025
Page 5

a mission to SEMICON Japan in December with city leadership. Representatives from the Office of
Economic Development are attending SEMICON West this week. California and Arizona will alternate
hosting the conference annually. Day one’s attendance in Phoenix included more than 20,000 attendees.

At the recent International Economic Development Council (IEDC) Conference the department was
recognized in the gold category for best print brochure - Asian District. Ms. O’Donnell reported FY25/26
business attraction achievements which included 16 company locates, 1,700 jobs with an average wage of
$72,000, and $8.5M in capital investment.

7.
Introduction of new business to be discussed at a future meeting.
No new business.

8.
Schedule of meetings.

The next Economic Development Advisory Board meeting is scheduled for December 2, 2025.

9.
Adjournment.

Without objection, the Economic Development Advisory Board meeting adjourned at 8:54 a.m.

I hereby certify that the foregoing minutes are a true and correct copy of the minutes of the Economic
Development Advisory Board meeting of the City of Mesa, Arizona, held on the 4th day of November 2025. I further
certify that the meeting was duly called and held and that a quorum was present.
Submitted by:

_____________________________________
Jaye O’Donnell
Economic Development Director

ms
(Attachments – 2)

Craig Coppola
Founding Principal,
CRE, CCIM, SIOR
ccoppola@leearizona.com
602-954-3762
Andrew Cheney
Principal,
CRE, CCIM, SIOR
acheney@leearizona.com
602-954-3769
Gregg Kafka
Principal,
CCIM
gkafka@leearizona.com
602-954-3777
November 2025
Nick Whitehouse
Associate
nwhitehouse@leearizona.com
602-912-3531
MARKET
UPDATE
www.c2brokerage.com/
Economic Development
Advisory Board
November 4, 2025
Attachment 1
Page 1 of 83

The Coppola-Cheney Team
Kaeli
Cabral
Marketing
Assistant
MARKETING
Jaiden
Fortune
Researcher
PROSPECTING
Parker
Dunn
Analyst
PROSPECTING
Chelsea
Clifton
Director of
Operations
TEAM OPS/
PITCH PREP
Allie Cebry
Project
Coordinator
REPORTING
Mary
Henk
Database
Manager
CRM
Peter
Ovens-Brown
Graphic
Designer
MARKETING/
PITCHES
Nick Whitehouse
Associate
TOUR/LEASE
NEGOTIATIONS
Craig Coppola
CCIM, CRE, SIOR
Founding Principal
VISION
Andrew Cheney
CCIM, CRE, SIOR
Principal
TOUR/LEASE
NEGOTIATIONS
Gregg Kafka
CCIM
Principal
TOUR/LEASE
NEGOTIATIONS
Economic Development
Advisory Board
November 4, 2025
Attachment 1
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Phoenix
Metropolitan Office
Market Overview
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Advisory Board
November 4, 2025
Attachment 1
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PHOENIX METROPOLITAN MARKET OVERVIEW
PHOENIX METRO OFFICE MARKET OVERVIEW
Net Absorption:
2021: 540,252 SF (Covid)
2022: 775,813 SF
2023: (484,855) SF
2024: (2,125,250) SF
2025
Q1: 398,769 SF
Q2: (77,780) SF
Q3: 120,763 SF
Economic Development
Advisory Board
November 4, 2025
Attachment 1
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Submarket
Total
Absorption
2022 (SF)
Total
Absorption
2023 (SF)
Total
Absorption
2024 (SF)
Total
Absorption
2025 Q1 (SF)
Total
Absorption
2025 Q2 (SF)
Total
Absorption
2025 Q3 (SF)
Metro Phoenix
775,813
(355,027)
(2,125,250)
398,769
(77,780)
120,763
Camelback
351,356
(60,325)
113,827
22,843
(21,128)
(251)
Midtown
(72,813)
9,230
(338,907)
73,587
(4,937)
(41,189)
Downtown
109,930
(62,802)
66,487
(5,231)
(83,849)
50,781
Scottsdale
Airpark
239,357
102,077
153,050
7,166
(25,769)
92,230
Mesa Downtown
36,020
(10,081)
(7,115)
7,185
(326)
(35,293)
Mesa East
(17,914)
(76,657)
24,197
56,177
(9,549)
14,858
Tempe
(342,593)
(528,484)
(6,048)
240,346
(138,746)
28,945
Chandler
383,171
(14,871)
(383,148)
41,528
56,503
184,912
Deer Valley
262,384
84,300
(269,294)
44,741
(69,954)
(111,747)
2022-2025 Q2 ABSORPTION
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Advisory Board
November 4, 2025
Attachment 1
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Submarket
Vacancy
2022 (%)
Vacancy
2023 (%)
Vacancy
2024 (%)
Vacancy
2025 Q1 (%)
Vacancy
2025 Q2 (%)
Vacancy
2025 Q3 (%)
Metro Phoenix
17.5%
17.8%
19.9%
19.6%
19.8%
19.5%
Camelback
19.1%
21.1%
18.7%
18.4%
19.9%
19.9%
Midtown
25.2%
23.9%
27.2%
26.4%
26.5%
25.9%
Downtown
21.8%
24.9%
24.6%
24.7%
26.0%
25.2%
Scottsdale
Airpark
12.9%
14.5%
13.0%
12.9%
13.1%
12.2%
Mesa Downtown
8.0%
9.5%
10.2%
9.1%
9.7%
12.5%
Mesa East
23.8%
31.0%
29.2%
24.6%
25.3%
23.5%
Tempe
18.9%
23.4%
23.0%
23.3%
24.2%
22.4%
Chandler
12.0%
13.7%
18.4%
17.9%
17.0%
14.7%
Deer Valley
17.8%
12.2%
16.0%
14.4%
15.7%
18.2%
DIRECT VACANCY RATES
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Advisory Board
November 4, 2025
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Sales Update
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Advisory Board
November 4, 2025
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SALES COMPS
TOP OF MARKET SALES - 2025
2801 E. Camelback
Price: $48,250,000
Price/SF: $416.53/SF
Size: 115,838 RSF
Closed Date: 6/30/2025
Price: $18,479,487
Price/SF: $309.18
Size: 59,770 RSF
Closed Date: 3/7/2025
Element at Kierland
Price: $645,100,00
Price/SF: $729.11
Size: 884,783 RSF
Closed Date: 6/26/2025
Scottsdale Quarter
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Advisory Board
November 4, 2025
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SALES COMPS
PORTFOLIO SALES - 2025
Block 23
Price: $77,354,361
Price/SF: $251.97/SF
Size: 307,000 RSF
Closed Date: 8/15/2025
Price: $39,835,000
Price/SF: $230.26
Size: 173,000 RSF
Closed Date: 8/15/2025
5090 N. 40th St.
Price: $39,865,763
Price/SF: $229.11
Size: 174,000 RSF
Closed Date: 8/15/2025
6991 E. Camelback Rd.
Price: $29,226,908
Price/SF: $218.93
Size: 133,500 RSF
Closed Date: 8/15/2025
3200 W. Ray
Price: $27,718,379
Price/SF: $207.63
Size: 133,500 RSF
Closed Date: 8/15/2025
3100 W. Ray
Price: $11,781,938
Price/SF: $144.56
Size: 81,500 RSF
Closed Date: 8/15/2025
1600 N. Desert
Price: $10,972,931
Price/SF: $134.64
Size: 81,500 RSF
Closed Date: 8/15/2025
1700 N. Desert
City Office Portfolio Sale
$266,000,000 with
1,251,704 SF of space, at
avg price/sf $212.51
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Advisory Board
November 4, 2025
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SALES COMPS
NOTABLE SALES - 2025
2155 E. Go Daddy Way
Price: $35,250,000
Price/SF: $235
Size: 150,000 RSF
Closed Date: 6/6/2025
Price: $22,400,000
Price/SF: $305.27
Size: 73,377 RSF
Closed Date: 5/16/2025
4950 S. 48th Street
Price: $22,050,000
Price/SF: $226.14
Size: 97,504 RSF
Closed Date: 3/20/2025
2045 E. Innovation Circle
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SALES COMPS
UGLY SALES - 2025
2800 N. Central
Price: $28,500,000
Price/SF: $76.87
Size: 370,736 RSF
Closed Date: 7/22/2025
Price: $13,500,000
Price/SF: $60.43
Size: 223,392 RSF
Closed Date: 1/22/2025
Elliot Center
Price: $17,080,000
Price/SF: $65.27
Size: 261,672 RSF
Closed Date: 6/23/2025
111 W. Monroe
Price: $10,050,000
Price/SF: $86
Size: 116,858 RSF
Closed Date: 7/22/2025
4645 E. Cotton Center
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SALES COMPS
2024
Price: $56,200,000
Price/SF: $306.64
Size: 183,274 RSF
Closed Date: 05/16/2024
The Beam on Farmer
24th At Camelback II
Price: $97,900,000
Price/SF: $319.02
Size: 306,877 RSF
Closed Date: 10/30/2024
24th At Camelback
Price: $86,100,000
Price/SF: $278.89
Size: 308,723 RSF
Closed Date: 4/25/2024
Northsight Corporate Center
Price: $42,250,000
Price/SF: $304.44
Size: 138,781 RSF
Closed Date: 4/30/2024
Price: $42,250,000
Price/SF: $255.72
Size: 165,220 RSF
Closed Date: 12/17/2024
7272 Old Town
Price: $60,000,000
Price/SF: $260.62
Size: 230,222 RSF
Closed Date: 5/28/2024
Camelback Lakes – 2850
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SALES COMPS
2023
2022
Price: $48,500,000
Price/SF: $692.86
Size: 70,000 RSF
Closed Date: 2/17/2023
The Grove
Luhrs Tower
Price: $6,900,000
Price/SF: $102.76
Size: 67,144 RSF
Closed Date: 5/10/2023
Mesquite Corporate Center
Price: $32,000,000
Price/SF: $402.33
Size: 79,537 RSF
Closed Date: 3/8/2023
Chandler Corporate Center I & II
Price: $22,000,000
Price/SF: $161.76
Size: 136,004 RSF
Closed Date: 1/4/2023
Price: $56,500,000
Price/SF: $220.44
Size: 256,308 RSF
Closed Date: 11/22/2022
Promenade Corporate Center
Price: $66,350,000
Price/SF: $572.78
Size: 115,838 RSF
Closed Date: 7/21/2022
Camelback Collective
3131/3133
Price: $72,100,000
Price/SF: $239.95
Size: 300,482 RSF
Closed Date: 9/1/2023
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Sales Comps:
1.
Overall pricing has declined since
2022
2.
Multiple different reasons
owners are selling
3.
Pricing way below replacement
cost
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Advisory Board
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STRESSED OUT BUILDINGS
One Two and Three Gateway
Status: Foreclosure
Size: 330,000 SF
Scoop: Western Alliance will
operate until market recovers
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Advisory Board
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STRESSED OUT BUILDINGS
East Gateway
Status: Sold for $82/SF
Size: 250,000
Scoop: Sold to local Buyer
Existing Owner couldn't perform
after anchor tenant walked
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STRESSED OUT BUILDINGS
Summit
Status: Owner cannot fund new
TI's
Size: 300,000 SF
Scoop: Will be coming to market
for sale
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Advisory Board
November 4, 2025
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Evolving Tenant Trends - 2025:
1.
Tenants right-sizing (still)
2.
Lobby Updates
3.
Case Studies
4.
Back-Office
5.
Spec Suites
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1.Right-sizing
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RIGHT-SIZING
25,000 SF
7,000 SF
20,000 SF
3,000 SF
80,000 SF
31,000 SF
35,000 SF
23,000 SF
70,000 SF
54,000 SF
70,000 SF
54,000 SF
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RIGHT-SIZING
180,000 SF
150,000 SF
50,000 SF
25,000 SF
100,000 SF
1,100 SF
32,000 SF
14,000 SF
90,000 SF
30,000 SF
36,000 SF
0 SF
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2.Lobby Updates
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LOBBY UPDATES - HFL
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LOBBY UPDATES - HFL
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LOBBY UPDATES - BOND
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LOBBY UPDATES - BOND
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LOBBY UPDATES – ESPLANADE
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LOBBY UPDATES – ESPLANADE
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LOBBY UPDATES – ESPLANADE
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3.Case Studies
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WHAT’S LEASING?
24TH AT CAMELBACK
•
Location, spec suite success, highly amenitized
•
Financial Services firms less than 20,000 SF are very active.
ESPLANADE III
•
Best views in the city, neighborhood within a neighborhood
•
Committed owner and trophy asset
GROVE
•
Brand new product in right location sells, best amenities in town
•
There was pent-up demand in Camelback Corridor.
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WHAT’S LEASING?
THE QUAD
•
Spent the money right the first time – MINIMAL TIs on the renewal,
meeting area, and restaurant on site
•
Tenants will pay more to not have to go through TI construction.
SKYSONG
•
Synergy with tech-related companies, great access to labor
•
ASU + great product = 740,000 SF of success.
LINK
•
Cool restaurant on site, top-shelf spec suites
•
Cool design and spec suites will overcome B-location.
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WHAT’S LEASING?
PARK CENTRAL
•
Transformed multi-use site, retail use in office space sped up
leasing
•
Comprehensive plan and comprehensive team wins.
CAVASSON
•
Freeway Access and Frontage, mixed-use development
•
Deep pockets can build superior product and amenities.
GAINEY CENTER II
•
Great located project with new FOCUS
•
A responsive owner/broker team and some cash can help
occupancy jump from 50% to 80%, and quickly
Economic Development
Advisory Board
November 4, 2025
Attachment 1
Page 37 of 83

WHAT’S LEASING?
ESPLANADE I, II, IV, V
•
There will always be tenants who want simply the best
•
They are beating George Oliver at their own game, for now
HAYDEN FERRY LAKESIDE
•
Iconic project repositioning itself
•
Reimagined lobbies and outdoor areas, connecting it to lake more
effectively
THE BEAM
•
New exciting construction
•
Fresh capital and fresh operator energy
Economic Development
Advisory Board
November 4, 2025
Attachment 1
Page 38 of 83

4.Back-Office
Economic Development
Advisory Board
November 4, 2025
Attachment 1
Page 39 of 83

BACK-OFFICE
Back Office Characteristics
• General Office or flex R & D
• Parking ratio >/= 5.8:1,000 SF
• </= 3 Stories
• >/= 49,000 SF
Economic Development
Advisory Board
November 4, 2025
Attachment 1
Page 40 of 83

BACK-OFFICE
Key Indicators
• Total Inventory
• 23.2 Million SF
• Direct Vacancy
• 21.4%
• Sublease Vacancy
• 8.9%
• Asking Rates
• $24.36/SF/Year, Full Service
Economic Development
Advisory Board
November 4, 2025
Attachment 1
Page 41 of 83

BACK-OFFICE
Economic Development
Advisory Board
November 4, 2025
Attachment 1
Page 42 of 83

BACK-OFFICE – CONVERSIONS
1515 W. 14 th Street
LPC Bought for
$83/SF
Was 220,00O SF of
Office
Will be 127,000 SF
of Distribution
Economic Development
Advisory Board
November 4, 2025
Attachment 1
Page 43 of 83

BACK-OFFICE – CONVERSIONS
Regents Centre – 1910 W. University Tempe
Class B Office with A
Spec Suites
In escrow with Opus
Entire campus will be
industrial
Economic Development
Advisory Board
November 4, 2025
Attachment 1
Page 44 of 83

BACK-OFFICE – CONVERSIONS
Crossfirst – I-17 Lincoln
LPC Bought for
$42/SF
Was 350k SF of
Office
Will be 390k SF of
Industrial
Economic Development
Advisory Board
November 4, 2025
Attachment 1
Page 45 of 83

BACK-OFFICE – CONVERSIONS
Perimeter Center Land – NWC Princess and 101
16.5 Acres
Was going to be 3
and 4 story Office
Will be 4 Industrial
Flex buildings
Economic Development
Advisory Board
November 4, 2025
Attachment 1
Page 46 of 83

BACK-OFFICE – CONVERSIONS
Elliot Ctr – 875 W. Elliot
Sold for $60/SF
Was 220,000 SF of
Office
Will be 274,000 SF
of Industrial
Economic Development
Advisory Board
November 4, 2025
Attachment 1
Page 47 of 83

BACK-OFFICE – CONVERSIONS
9977 N. 90 th Street
Sold for $77/SF
Was Office
Will be Medical
Economic Development
Advisory Board
November 4, 2025
Attachment 1
Page 48 of 83

5.Spec Suites
Economic Development
Advisory Board
November 4, 2025
Attachment 1
Page 49 of 83

Today’s
Spec Suite
Yesterday’s
Spec Suite
INCREASING QUALITY OF SPEC SUITES
Economic Development
Advisory Board
November 4, 2025
Attachment 1
Page 50 of 83

•
LL’s building ±5-10 spec suites at once
•
They lease
•
Rents grow
INCREASING QUALITY OF SPEC SUITES
Economic Development
Advisory Board
November 4, 2025
Attachment 1
Page 51 of 83

INCREASING QUALITY OF SPEC SUITES
Economic Development
Advisory Board
November 4, 2025
Attachment 1
Page 52 of 83

INCREASING QUALITY OF SPEC SUITES
Economic Development
Advisory Board
November 4, 2025
Attachment 1
Page 53 of 83

INCREASING QUALITY OF SPEC SUITES
Economic Development
Advisory Board
November 4, 2025
Attachment 1
Page 54 of 83

INCREASING QUALITY OF SPEC SUITES
Economic Development
Advisory Board
November 4, 2025
Attachment 1
Page 55 of 83

SPEC SUITES – COLLIER CTR
Economic Development
Advisory Board
November 4, 2025
Attachment 1
Page 56 of 83

SPEC SUITES – 3131 E CAMELBACK
Economic Development
Advisory Board
November 4, 2025
Attachment 1
Page 57 of 83

SPEC SUITES – GAINEY CENTER II
Economic Development
Advisory Board
November 4, 2025
Attachment 1
Page 58 of 83

Sublease
Update
Economic Development
Advisory Board
November 4, 2025
Attachment 1
Page 59 of 83

2020-2024 average annual total available sublease space was
5,315,240 SF.
Sublease space now expiring and becoming direct space.
METRO PHOENIX SUBLEASE E
METRO PHOENIX SUBLEASE INVENTORY
Inventory
trending
down
Economic Development
Advisory Board
November 4, 2025
Attachment 1
Page 60 of 83

CLASS A SUBLEASE BREAKDOWN
Space Size
Number of Options
100k+ SF
52 spaces (in 11 properties)
50k – 100k SF
61 spaces (in 17 properties)
25k – 50k SF
78 spaces (in 29 properties)
10k – 25k SF
47 spaces (in 38 properties)
Under 10k SF
80 spaces (in 65 properties)
Economic Development
Advisory Board
November 4, 2025
Attachment 1
Page 61 of 83

SUBLEASE MAP
Economic Development
Advisory Board
November 4, 2025
Attachment 1
Page 62 of 83

SUBLEASE MAP
SUBLEASE MAP
Deer Valley
Airport
486,602 SF ↑
13,983
Sky Harbor
Airport
570,052 SF ↑
18,943
Camelback
181,449SF ↑
2,531
Scottsdale
Airpark
253,381 SF ↓
(40,987)
Tempe
642,350 SF ↓ ↓
(246,251)
Chandler
530,529 SF ↓ ↓
(180,158)
Mesa East
0 SF
Mesa Downtown
0 SF
Economic Development
Advisory Board
November 4, 2025
Attachment 1
Page 63 of 83

Recent
Transactions
Economic Development
Advisory Board
November 4, 2025
Attachment 1
Page 64 of 83

RECENT TRANSACTIONS
Trans. Date
Occ. Date
Company
Address
Property Name
Size (SF)
Lease Term
Rate Structure
Eff. Rate
Rate Type
Free Rent
TI’s / Comments
2/7/25
1/1/26
Greenfield Road Offices
1420 N Greenfield Rd
1,360
36 months
$19.50/SF with
3% annual
increases
$20.09
NNN
0 months free
• As-is renewal with no
TI
2/7/25
2/1/25
Mesa Tower
1201 S Alma School Rd
1,434
40 months
$25.50/SF with
$0.50/SF annual
increases
$22.91/SF
FSG
5 months free
• TIs: $10.00/SF
1/31/25
2/1/25
Deeann Griebel
Mesa Tower
1201 S Alma School Rd
2,091
63 months
$25.95/SF with
3% annual
increases
$26.44/SF
FSG
3 months free
• TIs: $0.00/SF
1/16/25
7/1/25
Mesa Tower
1201 S Alma School Rd
49,207
60 months
$23.50/SF with
no annual
increases
$23.50/SF
FSG
0 months free
• TIs: $0.00/SF
12/9/24
2/1/25
Portico Place I
2121 W Chandler Blvd
4,048
65 months
$29.50/SF with
3% annual
increases
$29.28/SF
FSG
5 months free
• TIs: $20.00/SF
Economic Development
Advisory Board
November 4, 2025
Attachment 1
Page 65 of 83

RECENT TRANSACTIONS
Trans. Date
Occ. Date
Company
Address
Property Name
Size (SF)
Lease Term
Rate Structure
Eff. Rate
Rate Type
Free Rent
TI’s / Comments
7/1/25
9/1/26
Esplanade II
2525 E Camelback Rd
24,895
130 months
$62.50/SF with
2.5% annual
bumps.
$65.98
Full Service
10 months free
• TIs: $120/SF
7/1/25
2/1/26
Biltmore Center
2398 E Camelback Rd
14,256
132 months
$50.00/SF w/
$1/SF annual
increases
$49.55/SF
Full Service
12 months free
• TIs: $85.00/SF
7/1/25
9/15/25
Biltmore Center
2398 E Camelback Rd
9,851
37 months
$53.00/SF w/ 3%
annual increases
$53.22/SF
Full Service
1 Month Free
• TIs: $20.00/SF
1/1/25
7/1/25
BOND
3200 E Camelback Rd
9,995
99 months
$51.00/SF w/
$1.00 annual
increases
$51.00/SF
FSG
3 months free
• TIs: $80.00/SF
12/1/24
3/1/25
Esplanade II
2525 E Camelback Rd
9,605
39 months
$60.00/SF w/
3% annual
increases
$57.06/SF
FSG
3 months free
• TIs: $17.00/SF
Economic Development
Advisory Board
November 4, 2025
Attachment 1
Page 66 of 83

CURRENT LEASING TRENDS
Users coming back want:
1.Enhanced Experience (currently, juice worth the
squeeze)
2.Growth Potential
3.Shorter Term Leases
4.Ready to Occupy Space – MUST BE VERY COOL
Economic Development
Advisory Board
November 4, 2025
Attachment 1
Page 67 of 83

New Product
Update
Economic Development
Advisory Board
November 4, 2025
Attachment 1
Page 68 of 83

RECENT DELIVERIES
The Arbor
SIZE: 152,094
C of O: 10% Leased
Today: 75% Leased
ICON at Perimeter Center
SIZE: 32,054 SF
C of O: 100% Leased
Build to Suit
2023
2022
2021
SIZE: 183,526
C of O: 0% Leased
Today: 75% Leased
The Beam
Gen 1 @ GSQ
SIZE: 152,094
C of O: 5% Leased
Today: 83% Leased
SIZE: 175,094
C of O: 0% Leased
Today: 93% Leased
Axis
SIZE: 287,000
C of O: 55% Leased
Today: 96% Leased
100 Mill
Economic Development
Advisory Board
November 4, 2025
Attachment 1
Page 69 of 83

RECENT DELIVERIES
Rio Yards
Cavasson Phase II
2024
SIZE: 150,000
C of O: 47% Leased
Today: 63% Leased
SIZE: 150,000
C of O: 0% Leased
Today: 0% Leased
Economic Development
Advisory Board
November 4, 2025
Attachment 1
Page 70 of 83

UNDER CONSTRUCTION
Republic Services Building
Sprouts HQ at City North
2025
SIZE: 150,000
Build to Suit
SIZE: 265,525
Build to Suit
Economic Development
Advisory Board
November 4, 2025
Attachment 1
Page 71 of 83

Mesa Projects
Economic Development
Advisory Board
November 4, 2025
Attachment 1
Page 72 of 83

Union
2025
Economic Development
Advisory Board
November 4, 2025
Attachment 1
Page 73 of 83

WayPoint
Economic Development
Advisory Board
November 4, 2025
Attachment 1
Page 74 of 83

827 W. Grove
SIZE: 150,000
Build to Suit
SIZE: 265,525
Build to Suit
Economic Development
Advisory Board
November 4, 2025
Attachment 1
Page 75 of 83

827 W. Grove
SIZE: 150,000
Build to Suit
SIZE: 265,525
Build to Suit
Economic Development
Advisory Board
November 4, 2025
Attachment 1
Page 76 of 83

Gateway 202
Economic Development
Advisory Board
November 4, 2025
Attachment 1
Page 77 of 83

Gateway 202
Economic Development
Advisory Board
November 4, 2025
Attachment 1
Page 78 of 83

Gateway 202
Economic Development
Advisory Board
November 4, 2025
Attachment 1
Page 79 of 83

Summary
Economic Development
Advisory Board
November 4, 2025
Attachment 1
Page 80 of 83

1. Net Absorption is on track to stay positive this year
2. Few large users out there
3. Many Tenants are not finished giving back space
4. Spec Suites, done right, will lease
5. Class A owners investing in new Class A lobbies
6. Conversions from Back Office and Office becoming more common
7. Some distress is here
KEY LEASING TAKEAWAYS
Economic Development
Advisory Board
November 4, 2025
Attachment 1
Page 81 of 83

POTENTIAL FUTURE TRENDS
o
Work from Home continues for significant number of tenants
o
Zombie buildings will still show up in '26/'27
o
Absorption will remain tepid for the next two years
o
Building obsolescence further amplifies, B, B- and C have a tough future. No
matter the price. Deep pockets could win.
o
Deeply discounted A- building in good locations will be available.
o
Many tenants remain a hostage due to high relocation costs
Economic Development
Advisory Board
November 4, 2025
Attachment 1
Page 82 of 83

Arizona’s Early Childhood Agency
Committed to healthy development and learning from birth to age 5.
1
Economic Development
Advisory Board
November 4, 2025
Attachment 2
Page 1 of 13

Created by voters in 2006
and funded by tobacco tax.
Our three focus areas are:
Quality child care
Strengthening families
Preventive health
2
%
of brain growth
happens in the
first 5 years!
90
Economic Development
Advisory Board
November 4, 2025
Attachment 2
Page 2 of 13

We have a child care crisis.
Economic Development
Advisory Board
November 4, 2025
Attachment 2
Page 3 of 13

4
Demand
exceeds supply.
304,000 children in
Arizona may need
child care, but only
230,000 slots exist.
Child care wages
are low.
$14.60/hour is the
national median, making
recruitment and
retention difficult.
Families can’t
afford more.
12-32% of income is
spent on child care;
infant care costs more
than state college tuition.
Economic Development
Advisory Board
November 4, 2025
Attachment 2
Page 4 of 13

82%
Missed work
The child care crisis:
impact on working families.
35%
Left a job
90%
Say costs
have increased
73%
Report child care
options decreased
5
Economic Development
Advisory Board
November 4, 2025
Attachment 2
Page 5 of 13

33,887 children aged 5 and
under.
23,746 children live in home
where both parents work.
14,482 available child care slots
with licensed providers.
17% child care
gap in Mesa
6
Economic Development
Advisory Board
November 4, 2025
Attachment 2
Page 6 of 13

Here’s Arizona’s economic case for child care.
Economic Development
Advisory Board
November 4, 2025
Attachment 2
Page 7 of 13

8
Economic Impact of Early Childhood
Multiple studies have demonstrated the effectiveness of early childhood education. Money invested in early childhood development yields extraordinary public returns. Art Rolnick, economist and former head of research for the Federal Reserve Bank of Minneapolis explains why we must invest in early childhood education.
Economic Development
Advisory Board
November 4, 2025
Attachment 2
Page 8 of 13

Arizona’s economy loses
$4.7 billion annually.
Families lose
$3 billion annually
in earnings and job
search expenses.
Employers lose
$958 million
annually due to
absences & turnover.
The state loses
$725 million
annually in
tax revenue.
9
Economic Development
Advisory Board
November 4, 2025
Attachment 2
Page 9 of 13

Arizona community based solutions
PEEPS
funds 1,600
scholarships in Pima
County through library
property tax
Tempe PRE
serves 200
Preschoolers
through Tempe City
Council funding
Greater Yuma
Child Care
Taskforce
convened by economic
development group
10
Economic Development
Advisory Board
November 4, 2025
Attachment 2
Page 10 of 13

Economic impact of First Things First
$8.5 million
State revenue
$324 million
Economic output
2,800
Jobs supported
11
$9.7 million
Local tax revenue
Read more:
FTF investments contribute over $300 million annually to economy
Economic Development
Advisory Board
November 4, 2025
Attachment 2
Page 11 of 13

1. Connect through our
Child Care Solutions for
Businesses page.
Find resources to support employees
Calculate the financial impact
on your business
Connect with FTF to learn about
community-based solutions
1. Advocate for more
public support.
How can
you support?
12
Economic Development
Advisory Board
November 4, 2025
Attachment 2
Page 12 of 13

Arizona’s Early Childhood Agency
Committed to healthy development and learning from birth to age 5.
Thank you.
FirstThingsFirst.org
Thank you.
FirstThingsFirst.org
Economic Development
Advisory Board
November 4, 2025
Attachment 2
Page 13 of 13