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Downtown Chandler Market Analysis
Prepared as part of the
Chandler South Arizona Avenue Area Plan Update
February 2025
Prime Consultant: Logan Simpson
Prepared By:
Elliott D. Pollack & Company
5111 N. Scottsdale Road, Suite 202
Scottsdale, Arizona 85250
Downtown Chandler Market Analysis
TOC
Table of Contents
1.0 Introduction
1
2.0 Demographic Characteristics of the Downtown Chandler Region
3
3.0 Housing Within the Downtown Region
5
4.0 Downtown Region Office Market
17
5.0 Analysis of Downtown Chandler Proper
22
6.0 Conclusions & Recommendations
27
Downtown Chandler Market Analysis
1
1.0 Introduction
The purpose of this market analysis is to evaluate the state of the Downtown Chandler
Region and how it competes in the regional economy given its current retail, cultural, and
entertainment assets. The analysis is focused on determining if Downtown Chandler is
continuing to expand and grow with a long-term effort to make the Downtown area a
walkable place of 18-hour activity. Specifically, the study will evaluate the state of the
housing and office markets which may help to stabilize and expand visitation.
The study area is known as the Downtown Region and includes five distinct districts
including the Historic Downtown area along Arizona Avenue between Chandler Boulevard
and Frye Road. Overall, the Region extends for more than two miles from Ray Road on the
north to the Loop 202 freeway on the south. It also encompasses an area from Alma School
on the west to McQueen Road on the east. The Region includes a diverse population and
real estate market that includes modern apartment complexes, historic commercial and
single-family properties, a golf course and resort, and manufactured housing parks among
other uses.
The Downtown Region includes four districts that surround the Downtown District.
• The Northern District includes the commercial development along Arizona Avenue
north of Chandler Boulevard and residential neighborhoods on the east and west
sides of the road.
• The Eastern District is elongated along the eastern side of the Union Pacific rail lines.
Residential development is found north of Commonwealth Avenue with industrial
properties and a new apartment complex situated to the south.
• The San Marcos District includes the San Marcos Golf Course and surrounding
residential properties.
• The Southern District south of Frye Road includes commercial and residential
development as well as a Walmart anchored shopping center and a vacant property
on the west side of Arizona Avenue that is planned for mixed use development.
The following map illustrates district boundaries.
Downtown Chandler Market Analysis
2
Downtown Chandler Market Analysis
3
2.0 Demographic Characteristics of the Downtown Chandler Region
The Downtown Region has an estimated population of 15,140 persons in 2024. The largest
district is the Northern District representing more than one third of the Region’s population.
The Northern District also has the lowest percentage of renter-occupied units among all the
districts. The San Marcos District has the highest percentage of rental units due to several
apartment complexes situated along the perimeter of the district. The remainder of the
District is primarily in single family uses within the San Marcos Country Club Estates
subdivision with homes selling for upwards of $1 million and vacant lots fronting on the golf
course selling for more than $400,000. The Southern District has a high level of renter-
occupied units, but many of those rentals are single family homes. All the districts have a
lower median age than the city-wide median of 38 years. Household incomes are also much
lower than the city-wide median income which is estimated at $107,000. There is a wide
disparity between the median income and average income for the San Marcos District. This
indicates that the average income is skewed by those residents living in the San Marcos
Country Club Estates community.
Expectedly, the Downtown Region has a high percentage of Hispanic origin residents than
the city-wide average. In fact, on a percentage basis, the Hispanic population in the
Downtown Region is 2.4 larger than the city-wide average. The Eastern and Northern
Districts have the highest percentage of Hispanic residents. Overall, the Downtown Region
has a well-rounded mix of races and ethnicities.
Downtown
Southern
Eastern San Marcos
Northern
Downtown
City of
District
District
District
District
District
Region
Chandler
Population
585
3,930
3,191
2,187
5,247
15,140
285,729
Households
203
1,546
927
1,105
1,697
5,478
107,666
Families
105
723
678
516
1,175
3,197
73,755
Average Household Size
2.88
2.54
3.43
1.98
3.06
2.76
2.64
Owner Occupied Housing Units
50
369
379
186
916
1,900
71,339
Renter Occupied Housing Units
153
1,177
548
919
781
3,578
36,327
% Renter Occupied Units
75.4%
76.1%
59.1%
83.2%
46.0%
65.3%
33.7%
Median Age
31.8
31.5
28.2
34.1
33.4
31.9
38.0
Median Household Income
$56,442
$54,243
$49,736
$66,201
$51,304
$55,063
$107,339
Average Household Income
$84,045
$68,561
$68,855
$124,209
$64,075
$79,020
$140,306
Source: ESRI
2024 Demographic Characteristics of Downtown Region By District
Downtown Chandler Market Analysis
4
The demographic characteristics of the Downtown Region population are consistent with
that found in the original townsite of a community where housing units are in many cases
more than 60 years old. As will be seen in the following section on the housing market, the
Downtown Region contains a variety of housing opportunities for all income ranges which is
reflected in the modest household incomes and the younger population found in the area.
Race and Ethnicity
Persons
Percent
Persons
Percent
Persons
Percent
White Alone
252
43.0%
1,342
34.1%
740
23.2%
Black Alone
76
13.0%
439
11.2%
249
7.8%
American Indian Alone
21
3.6%
161
4.1%
115
3.6%
Asian Alone
32
5.5%
170
4.3%
75
2.3%
Pacific Islander Alone
3
0.5%
18
0.5%
16
0.5%
Some Other Race Alone
99
16.9%
1,012
25.7%
1,079
33.8%
Two or More Races
103
17.6%
789
20.1%
918
28.8%
Total Population
585
100.0%
3,930
100.0%
3,191
100.0%
Hispanic Origin (Any Race)
248
42.4%
2,126
54.1%
2,308
72.3%
Race and Ethnicity
Persons
Percent
Persons
Percent
Persons
Percent
Persons
Percent
White Alone
1,239
56.7%
1,721
32.8%
5,294
35.0%
160,294
56.1%
Black Alone
307
14.0%
291
5.5%
1,362
9.0%
18,001
6.3%
American Indian Alone
63
2.9%
196
3.7%
556
3.7%
5,715
2.0%
Asian Alone
158
7.2%
80
1.5%
515
3.4%
36,288
12.7%
Pacific Islander Alone
9
0.4%
13
0.2%
59
0.4%
857
0.3%
Some Other Race Alone
163
7.5%
1,784
34.0%
4,137
27.3%
24,858
8.7%
Two or More Races
248
11.3%
1,161
22.1%
3,219
21.3%
39,716
13.9%
Total Population
2,187
100.0%
5,247
100.0%
15,140
100.0%
285,729
100.0%
Hispanic Origin (Any Race)
486
22.2%
3,503
66.8%
8,671
57.3%
68,004
23.8%
Source: ESRI
2024 Race & Ethnicity of Downtown Region By District
Downtown Region
Southern District
Eastern District
San Marcos
Northern District
Downtown District
City of Chandler
Downtown Chandler Market Analysis
5
3.0 Housing Within the Downtown Region
The Downtown Region contains a small percentage of single family detached units and a
much higher percentage of multifamily units than is found city-wide. Only one-third of all
housing units are classified as single-family in the Region. The mix of housing is in some
respects a result of multifamily housing development that has occurred over the past
decade. The Northern District has the highest percentage of single-family homes while the
San Marcos District has the lowest percentage due to apartment complexes that have been
developed along the periphery of the District. The Southern District also has a low
percentage of single-family units due to the construction of the Olympus Steelyard complex
in 2015.
Units in
Structure
Units
Percent
Units
Percent
Units
Percent
Total
233
100.0%
1,581
100.0%
933
100.0%
1, detached
46
19.9%
228
14.4%
307
32.9%
1, attached
40
17.4%
150
9.5%
43
4.6%
2
0
0.0%
35
2.2%
126
13.5%
3 or 4
11
4.7%
163
10.3%
60
6.4%
5 to 9
30
12.7%
201
12.7%
63
6.8%
10 to 19
38
16.5%
294
18.6%
100
10.7%
20 to 49
8
3.4%
92
5.8%
7
0.7%
50 or more
54
23.3%
324
20.5%
30
3.2%
Mobile home
5
2.1%
92
5.8%
190
20.4%
Boat, RV, van
0
0.0%
0
0.0%
10
1.1%
Units in
Structure
Units
Percent
Units
Percent
Units
Percent
Units
Percent
Total
1,124
100.0%
1,890
100.0%
5,761
100%
113,370
100.0%
1, detached
155
13.8%
1,161
61.4%
1,897
33.1%
78,625
69.4%
1, attached
52
4.6%
42
2.2%
327
5.5%
6,063
5.3%
2
0
0.0%
115
6.1%
276
4.7%
1,136
1.0%
3 or 4
64
5.7%
49
2.6%
347
5.9%
4,160
3.7%
5 to 9
218
19.4%
147
7.8%
659
11.6%
3,751
3.3%
10 to 19
362
32.2%
244
12.9%
1,038
18.4%
8,188
7.2%
20 to 49
78
6.9%
0
0.0%
184
3.2%
2,985
2.6%
50 or more
195
17.3%
38
2.0%
640
11.0%
6,024
5.3%
Mobile home
0
0.0%
87
4.6%
374
6.3%
2,361
2.1%
Boat, RV, van
0
0.0%
8
0.4%
18
0.3%
76
0.1%
Source: ESRI
Northern District
Downtown District
Southern District
Eastern District
San Marcos
City of Chandler
Downtown Region
Housing Mix
Downtown Region & City of Chandler
Downtown Chandler Market Analysis
6
The housing market in the Downtown Chandler Region and in the neighborhoods
surrounding the Downtown encompass a variety of housing types targeting virtually all
income categories. The city’s Public Housing Authority has a total of 200 apartment units in
five complexes situated within or immediately adjacent to the Downtown Region on the east
side. In addition, the city received approval for the development of a new 157-unit public
housing complex under HUD’s Rental Assistance Demonstration (RAD) Program known as
The Villas on McQueen at 120 N. McQueen, just outside the boundary of the Downtown
Region. The complex is being built in conjunction with the city by Gorman & Company, a
national affordable housing developer.
The City of Chandler also announced a second RAD redevelopment project of its public
housing inventory with the development of Haven on Hamilton in partnership with Brinshore
Development. The proposed 250 unit of public housing complex will replace the current
apartments called Casa Bonita at 71 South Hamilton Street. Current tenants will be moving
into the city’s first redevelopment project, Villas on McQueen, when it is completed. The two
RAD complexes will increase the city’s public housing inventory by 97 units.
Two Low Income Housing Tax Credit (LIHTC) complexes totaling 180 units are situated
within the Downtown Region. Two additional complexes totaling another 307 units are
located north of the Downtown Region boundaries on Ray Road.
Housing Type
Units
Existing Public Housing Properties
200
Type
Address
Location
Public Housing Complex
130 N. Hamilton St.
Within Eastern District
Public Housing Complex
210 N. McQueen Rd.
Within Eastern District
Public Housing Complex
73 S. Hamilton St.
Immediately adjacent to Eastern District
Public Housing Complex
660 S. Palm Lane
Immediately adjacent to Southern District
Public Housing Complex
127 N. Kingston St.
Within Eastern District
Rental Assistance Demonstration (RAD) Program
407
Villas on McQueen*
120 N. McQueen Rd.
Immediately adjacent to Eastern District
157
Haven on Hamilton*
71 S. Hamilton St.
Immediately adjacent to Eastern District
250
LIHTC Complexes
180
Chandler Gardens
300 E. Commonwealth Ave.
Within Eastern District
120
Colonia Del Rey
120 N. McQueen Rd.
Within Eastern District
60
*Under construction
Sources: City of Chandler, ADOH
Affordable Housing Complexes
Downtown Region
Downtown Chandler Market Analysis
7
The Downtown Region market-rate apartment market is comprised of eight complexes with
2,210 units. The market in general appears healthy with an overall vacancy rate of 13.0%
which includes two complexes, DC Heights and Encore Novo currently in lease up. If those
two complexes are excluded from the list, the vacancy rate for stabilized properties declines
to 6.3%.
For the city-wide apartment market, the overall vacancy rate is 8.3%, and 6.0% when
excluding units in lease up built in 2023 and 2024. Units in the Downtown Region on average
are slightly less expensive than the city-wide average. However, most of the complexes are
offering rents that are at or above the city-wide average. The average rent in the Downtown
Region is skewed by the rents at The Tides at Downtown Chandler which is $1,154 for a 395
square foot unit.
According to city records, another 1,381 units in five complexes have been approved within
or near the Downtown Region but have not yet been constructed. More than one-half of that
apartment pipeline is accounted for in one project – the District Downtown situated at the
southeast corner of Pecos and Arizona Avenue.
Year
Average
Average
Rent
Vacancy
Complex
Address
Built
Units
Rent
Sq. Ft.
Per SF
Rate
Tides at Downtown Chandler
868 S Arizona Ave
1985
374
$1,154
395
$2.93
7.0%
Fairways at San Marcos
777 W Chandler Blvd
1988
352
$1,614
965
$1.67
6.0%
Linq, The
125 S Alma School Rd
2000
324
$1,936
973
$1.99
5.0%
IMT Chandler
235 E Ray Rd
2002
221
$1,915
1,007
$1.90
2.0%
Olympus Steel Yard
155 E Frye Rd
2015
301
$1,676
890
$1.88
9.0%
Summit at San Marcos
445 W Chandler Blvd
2018
273
$1,863
927
$2.01
8.0%
DC Heights
222 W Boston St
2023
157
$1,775
767
$2.31
25.0%
Encore Novo
333 E Commonwealth Ave
2024
208
$1,706
810
$2.11
63.0%
Totals
2,210
$1,673
830
$2.11
13.0%
Excluding Units in Lease Up
1,845
$1,660
838
$2.09
6.3%
City Wide Apartment Market
24,898
$1,712
938
$1.84
8.3%
City Wide Apartment Market Excluding Units in Lease Up
23,288
$1,692
940
$1.82
6.0%
Source: RealData
Market Rate Apartment Complexes
Downtown Region
Downtown Chandler Market Analysis
8
In addition, the Commonwealth Lofts townhomes project of 39 units is currently under
construction along the south side of Commonwealth Avenue at Ithaca Street. The site is just
outside the boundaries of the Downtown Region.
Overall, the Downtown Region market-rate apartment market appears healthy with some
new complexes in lease up. Rents and vacancy rates are similar to city-wide averages
although the newer complexes, DC Heights and Encore Novo, have smaller average unit
sizes than the older complexes.
As noted previously, the rental apartment market in the Downtown Region offers a wide
range of housing opportunities from public housing to LIHTC complexes to market rate
properties. These complexes all contribute to making the Downtown area a walkable
community center with a variety of available services to the public.
Housing Sales Trends
Detailed and timely data on housing sales for the Downtown Region is not available from the
U.S. Census. Instead, data from The Cromford Report was accessed for zip code 85225
which encompasses the northeast part of Chandler north of Pecos Road and the entire
Downtown Region. Zip code 85225 also includes most of the city’s affordable and public
housing stock, which includes both single-family and multifamily units as shown in the
following exhibit.
Complex
Units
One Chandler
291
The Cottages
26
Greyhawk Residences
253
The Marco
16
District Downtown
795
Total
1,381
Source: City of Chandler
Approved But Not Built Complexes
Downtown Region
Downtown Chandler Market Analysis
9
The following charts illustrate the change in single family housing resales in zip code 85225
since 2012 as well as a comparison to city-wide housing sales. In 2021, the average home
price in zip code 85225 increased by 35% from $449,750 to $529,500. Prices increased by
another 18% in 2022 but then declined in 2024. The chart also shows that the number of
sales declined in 2022 to 2024 primarily due to increases in mortgage rates as well as the
runup in prices.
Downtown Chandler Market Analysis
10
City-wide, single family resale prices increase by the same percentage in 2021 and 2022,
declined in 2023, but then increased in 2024. Today the average home price in the city is
approaching $700,000 while prices in zip code 85225 are in the $500,000 range. The number
of sales city-wide also fell off dramatically in 2023 and are now only 54% of what they were
in 2020.
The condominium market within the Downtown Region exhibited a similar pattern although
prices have been more variable falling by 12% in 2023. The number of sales has fallen off
similar to the single-family market.
Downtown Chandler Market Analysis
11
Downtown Chandler Market Analysis
12
Home Ownership & Rental Trends
Census data also has limited information on the type of housing units and ownership
patterns for small geographic areas. In order to study the pattern of ownership and rental
units, census tract data was downloaded for four census tracts that encompass the
Downtown Region (data is from the 2018-2022 five-year estimates). Those tracts include
5229.03, 5230.02, 5231.02 and 5231.04. While the boundaries of the tracts are larger than
the Downtown Region, the data will provide some indication of ownership patterns.
Downtown Region Census Tracts
Sale Price
% Change
Sales
Sale Price
% Change
Sales
2012
$153,846
1,009
$87,170
199
2013
$199,907
29.9%
902
$111,939
28.4%
222
2014
$207,664
3.9%
833
$113,931
1.8%
196
2015
$231,762
11.6%
938
$153,429
34.7%
197
2016
$258,113
11.4%
1,041
$141,083
-8.0%
246
2017
$267,704
3.7%
933
$157,532
11.7%
262
2018
$298,120
11.4%
910
$187,858
19.3%
240
2019
$310,264
4.1%
903
$202,008
7.5%
258
2020
$333,484
7.5%
876
$249,146
23.3%
365
2021
$449,752
34.9%
870
$307,286
23.3%
358
2022
$529,479
17.7%
596
$388,963
26.6%
207
2023
$531,014
0.3%
439
$341,327
-12.2%
153
2024
$499,930
-5.9%
442
$354,620
3.9%
122
Source: The Cromford Report
Single Family and Condo Resale Prices
Single Family
Condo
Zip Code 85225
Downtown Region
Downtown Chandler Market Analysis
13
The data demonstrates that the Downtown Region housing inventory (within the four census
tracts) has, not unexpectedly, a low percentage of single family detached units at 47.4% of
total units. Comparatively, single family units account for 69.0% of the city-wide housing
inventory. Of further note, approximately 30% of single-family units in the Downtown Region
census tracts are rented compared to 16% city-wide. Another 36% of single attached units
(townhomes) in the Downtown Region are also rented compared to 24% city-wide. The high
percentage of rented single family and townhome units is likely a reflection of the price of
those units and their age which are prime targets of investors.
Another 34% of mobile home units are rented as well. The mobile home inventory within the
Downtown Region census tracts represents about 34% of all mobile homes in the city. While
mobile or manufactured homes provide affordable housing for the local population, the
condition of those units may in some cases be substandard and potentially hazardous to
residents if they were manufactured prior to June 1976 when HUD adopted construction and
safety standards for the industry. Mobile home parks have also become targets for
redevelopment which often leads to resident relocation issues. This issue, in particular,
should be anticipated by the city.
Redevelopment Opportunities
Based on the preceding analysis, several areas of the Downtown region show potential for
redevelopment.
• Area north of Frye Road and west of Arizona Avenue
The area between Boston Street and Frye Road is already going through a major
transition in ownership. The area is comprised of the original townsite of Chandler
Total
Units in Structure
Units
% of Total
Units
% of Total
Units
% of Total
1, detached
2,908
70.1%
1,241
29.9%
4,149
47.4%
1, attached
287
64.2%
160
35.8%
447
5.1%
2
31
14.8%
178
85.2%
209
2.4%
3 or 4
27
4.1%
639
95.9%
666
7.6%
5 to 9
17
2.5%
673
97.5%
690
7.9%
10 to 19
122
11.7%
923
88.3%
1,045
11.9%
20 to 49
-
0.0%
218
100.0%
218
2.5%
50 or more
-
0.0%
607
100.0%
607
6.9%
Mobile home
474
66.0%
244
34.0%
718
8.2%
Boat, RV, van, etc.
8
100.0%
-
0.0%
8
0.1%
Total Units
3,874
44.2%
4,883
55.8%
8,757
100.0%
ACS 2022 5-Year Estimates Tables
Downtown Region Census Tracts
Tenure by Units in Structure
Renter-Occupied
Owner-Occupied
Downtown Chandler Market Analysis
14
platted in 1913 and 1920. Today, of the estimated 117 parcels in the area, 66 are
owned by absentee owners (many of the lots are vacant and ownership is listed as an
LLC) and 9 are owned by the city of Chandler. Combined, that represents 64% of all
parcels with only 42 owner-occupied properties. Further, the U.S. Census estimates
there are a total of 69 single family housing units in the area and one-half of the units
or 34 are rented. This indicates the area has been turning over from a predominantly
owner-occupied to a renter-occupied neighborhood.
A similar transition of ownership occurred on the property to the north on Boston
Street where the DC Heights apartment complex is located today. In 2006, the area
was nearly fully developed with single family homes. By 2008, virtually all those
homes were removed in anticipation of redevelopment. While the subject area is
larger in size with many absentee owners, it may be redeveloped in a piecemeal
fashion unless a plan for the area is prepared, or the city becomes involved in
acquisition.
Occupant
Absentee
City
Owned
Owner
Owned
Totals
42
66
9
117
35.9%
56.4%
7.7%
100.0%
Source: Maricopa County Assessor
Land Ownership Patterns
North of Frye Road, West of Arizona Avenue
Downtown Chandler Market Analysis
15
Potential Redevelopment Area
• South of Frye Road, east of Arizona Ave
This neighborhood has been in transition for a number of years and was the subject
of a ULI Technical Assistance Panel (TAP) report in 2022. The construction of
Olympus Steelyard apartment complex in 2015 brought attention to the
neighborhood as a potential location for private investment. As of September 2024,
the city owned 43 parcels in the area including scattered site public housing units.
Habitat for Humanity has also built single family housing in the area. The area has
also experienced new commercial development along Arizona Avenue.
The residential housing in the area is somewhat distant from most of the commercial
activity in the Downtown area and the efforts of the city appear to be focused on
retaining the historic and mostly single-family residential character of the area. The
extent of city-owned property provides the opportunity to further enhance the
availability of housing in the area, including intensifying densities if warranted and
attracting private investment. The ULI TAP report outlined a number of strategies for
this residential area.
Boston St.
Frye Rd.
Chicago St.
Dakota St.
Arizona Ave.
California St.
Downtown Chandler Market Analysis
16
Southeast Residential Development Area
• Mobile home parks in the Eastern District
The mobile home parks east of Ithaca Street along Chandler Boulevard may be
targets for redevelopment in the future. Combined with vacant and underutilized
parcels in the area, a total of about 20 acres could be available for redevelopment.
The sites are zoned MF-1 which allows up to 12 units per acre in density.
Downtown Chandler Market Analysis
17
Potential Redevelopment Area – East Chandler Boulevard
Summary
Overall, the housing market within the Downtown Region appears healthy and provides a
mix of affordable and market-rate housing opportunities for Chandler residents. However,
single-family resale prices and high mortgage rates have driven some households out of the
market. Mortgage rates will likely fall slowly over the next couple of years, which may
reinvigorate the market. Redevelopment opportunities abound in the Region, particularly
on the west side of the Downtown District and on the east side of the Southern District. The
recent construction of multifamily complexes will assist with making the Downtown District
an 18-hour walkable environment for local residents. The future development of the One
Chandler complex will, in particular, be a catalyst that could change the character of the
Downtown District.
Chandler Blvd.
McQueen Rd.
Hamilton St.
Detroit St.
Ithaca St.
Downtown Chandler Market Analysis
18
4.0 Downtown Region Office Market
The Chandler Downtown Region is an important employment center for the city which
includes most of the city’s administrative offices. Aside from those city offices, there are
three privately owned office buildings which include:
• 55 N. Arizona Place, recently redeveloped as “The Jonathan” with 104,283 square
feet of space.
• 25 S. Arizona Place, recently redeveloped as “The Alexander”, a 112,070 square foot
building.
• 180 S. Arizona Avenue known as “New Square”, a 51,000 square foot building.
We understand the recently developed Overstreet complex includes about 19,500 square
feet of office space. We have not been able to verify occupancy at the property.
The Downtown Region office market has experienced significant vacancies since the start
of the COVID-19 pandemic in 2020 and today shows a 25% vacancy rate which includes
subleased space that is now on the market through existing tenants. As a result of the work-
from-home trend, many tenants have vacated space and vacancy rates have surged, not
only in Chandler but across the country. The following chart shows the office inventory
remaining flat through 2020 when the New Square office building entered the market.
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The two properties on Arizona Place are owned by the same company and are now being
repositioned in the market. The vacancy rate for The Jonathan is estimated at 75% including
a large amount of subleased space. An important tenant in the building is the University of
Arizona that offers classes across a wide variety of disciplines. Both buildings have ground
floor retail space available. The Alexander has a vacancy rate of 10.7% while New Square
has a 5% vacancy rate.
Subleased space has become a significant issue for the office market as tenants vacated
space over the last few years. Across the city of Chandler, subleased space has increased
from just 42,000 square feet in 2020 to 830,000 square feet today. As leases expire in the
future, landlords will need to fill those spaces.
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The city-wide office market is showing a bit more stability than the Downtown Region market
although vacancies have risen from 8.8% in 2020 to 19.0% in 2024. Most commercial real
estate brokers believe the office market will begin to stabilize in 2025 with vacancies leveling
off and potentially falling as companies ask their employees to return to the office.
Suburban markets, however, may still be facing difficulties as tenants are flocking to the
newest Class A buildings in prime locations in Tempe, Scottsdale, and the Camelback
corridor. Rents in the Downtown Region have typically been higher than city-wide rents until
2024. This may be result of the high vacancy rate in 55 N. Arizona Place.
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Downtown Chandler Market Analysis
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In summary, the office market is an important component of the Downtown Region real
estate market, providing the opportunity to bring tenants and employees to Downtown
Chandler in support of the retail and restaurant markets. Historically, the Downtown Region
office market has outperformed the city-wide market from the standpoint of rents and
vacancy rates. While it is experiencing distress today, it is expected to slowly recover as the
redeveloped buildings on Arizona Place gain acceptance in the market.
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5.0 Analysis of the Downtown District
The Downtown District consists of the area between Chandler Boulevard and Frye Road on
the north and south and between Dakota Street and the railroad on the west and east. It
contains most of the entertainment, retail, restaurant, hotel, and office space in the
Downtown Region. It is also what most people refer to as Downtown Chandler.
Downtown Chandler has a variety of entertainment options that distinguish it from
competing downtowns, including Gilbert’s Heritage Square which is a direct competitor.
Some of those competitive advantages include the LOOK Dine-In Cinemas and the Chandler
Center for the Arts which includes a 1,500-seat mainstage and two smaller theaters.
Overall, the Downtown area has:
• 45 restaurants and bars.
• 21 retail stores.
• 315,000 square feet of office space. Approximately 282,000 square feet are within
four major office buildings, with the remainder in small office buildings.
• The University of Arizona Chandler campus.
• Arizona State University Innovation Center.
• 12 live music venues and five art spaces.
• Two hotels with 51,000 square feet of convention space.
• Five parking garages with over 3,300 parking spaces.
Downtown Chandler is also supported by an Enhanced Municipal Services District (EMSD),
one of only four in Maricopa County, which provides funding for event management and
maintenance through the Downtown Chandler Community Partnership (DCCP). Two other
EMSDs are in Tempe and Phoenix. Mesa has established a formal improvement district for
the square mile around its downtown area that assesses 529 properties. For FY 2025, the
Mesa ID raised $371,000. The city contributes another $685,000, bringing the total budget
for event management and maintenance to $1,056,000. The Tempe and Phoenix EMSD’s,
while different in size and scope, raised $917,000 and $1.65 million respectively in FY 2025.
The Chandler EMSD raised $243,500 in tax year 2024 (FY 2025). The city contributed another
$131,000 in FY 2025 bringing the total budget available to DCCP to $374,500. We are
uncertain if there are any other funding sources that could increase the budget of the DCCP.
Many of the larger buildings in the Downtown contribute a substantial amount of funds as
part of the EMSD. For instance, The Jonathan and The Alexander office buildings were
assessed nearly $54,000 in 2024. The Hilton Garden Inn and the New Square office building
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were assessed nearly $29,000 for the EMSD. Just these four buildings contribute 34% of the
total EMSD assessment because of their high assessed values.
Downtown Chandler is also an important employment center for the community supported
by the City of Chandler administrative operations. Within the entire Downtown Region, MAG
estimates there are 5,960 jobs. The Downtown portion of that workforce is 2,550
employees. About 39% of those employees work for the city.
Competitive Analysis
In order to assess the competitive environment among similar downtown areas, data was
collected for the Gilbert Heritage District which has evolved as a food-centered area over
the past decade. Visitation data was collected from Placer.ai for both downtowns along
with employment estimates from MAG.
The Gilbert Heritage District is defined as north of the Union Pacific Railroad and south of
the Western Canal. To the east, residential development was included in the District beyond
Elm Street which is the street that separates commercial from residential development. The
area encompasses 81 acres. By comparison, Downtown Chandler is 145 acres in size.
Gilbert Heritage District
The Heritage District, according to the Town of Gilbert website, is comprised of:
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• 34 restaurants
• 16 retail shops
• 82,600 square feet of office space
• 2,425 parking spaces
There are no multifamily developments directly within the boundaries of the Heritage
District. A small townhome development of 32 units was constructed in 2021 in the
northeast corner of the District. A 172-unit apartment complex known as District Lofts was
built in 2016 just outside the District boundaries west of the railroad.
There are no hotels within the Heritage District. An educational building on Vaughn Avenue
is currently used by Park University and the University of Arizona which offers bachelor’s and
master’s degrees in nursing. The Heritage District also has the Hale Theater for live
performances with a seating capacity of 372. The District does not employ an Enhanced
Municipal Services District for funding.
The following table summarizes employment estimates as prepared by MAG within each of
the downtowns. Chandler has twice as many employees as Gilbert, with about 34% of jobs
within the government category. By comparison, Gilbert’s largest employment category is
consumer services at 800 employees which includes the restaurant industry.
Industry Cluster
Employers
Employees
Employers
Employees
Business Services
18
260
7
80
Construction
3
40
3
50
Consumer Goods Manufacturing
2
10
1
120
Consumer Services
24
480
28
800
Education
3
150
1
10
Finance, Insurance, & Real Estate (FIRE)
5
130
7
40
Government, Social, & Advocacy Services
14
990
3
20
Health Care
-
-
1
5
High Tech Manufacturing & Development
2
50
-
-
Hospitality, Tourism, & Recreation
6
110
1
7
Media, Publishing, & Entertainment
3
50
1
10
Retail
9
80
4
60
Transportation & Distribution
6
200
3
70
Total
95
2,550
60
1,272
Source: MAG
Downtown Chandler
Gilbert Heritage District
Employment in Downtowns
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Visitation to each of the downtowns was collected from Placer.ai. Placer uses cell phone
location data to track the movement of persons across the country. The data can identify
where a visit originated, how long the person was at the destination, and how many times
they may visit a site. Visitation to Chandler’s and Gilbert’s downtowns are essentially the
same with more than 4 million visits each year. Gilbert has attracted slightly more visits in
prior years. While Gilbert’s attraction is primarily focused on restaurants, Chandler’s
visitation is a combination of work and recreation since it has a much larger employment
base including office space that can accommodate private companies. This employment
base helps drive the retail and restaurant businesses in the area.
Visits to the two downtowns follow an expected pattern with the high season extending from
February through May and the low season occurring from June through September.
Last 12 Months
Downtown
2021
2022
2023
Ending Oct 2024
Chandler Downtown
3,572,383
4,014,942
4,002,011
4,065,498
% Change
12.4%
-0.3%
1.6%
Gilbert Heritage District
3,968,356
4,162,345
4,276,245
4,104,425
% Change
4.9%
2.7%
-4.0%
Source: Placer.ai
Annual Visitation 2021 - 2024
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Summary
Downtown Chandler competes positively against the nearby competition of the Gilbert
Heritage Square. While Gilbert has created a significant attraction with its offerings of
restaurants, it has a limited employment and visitor base beyond its food-centered focus.
The Town attempted to grow the visitor market with the construction of an educational
building. Unfortunately, the first tenant did not perform, and the property has now been
backfilled with two other universities. There are few residential properties within walking
distance of Gilbert Road and the District has no hotels and few office properties available
for new businesses. This will likely change in the future and a mixed-use project known as
Heritage Park situated north of the Western Canal may be starting construction in the near
future with retail and restaurant space and 288 apartment units.
By comparison, Downtown Chandler has a more well-rounded economy with a variety of
uses that will continue to support future growth including:
• The Crowne Plaza Resort with its convention facilities.
• The historic buildings and portico.
• The new Hilton Garden Inn.
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• The Chandler Center for the Arts.
• More than 300,000 square feet of office space.
• Multifamily complexes within or adjacent to the Downtown area.
• An economy that is not solely based on restaurant and bar sales.
These and other assets make Downtown Chandler the preeminent downtown community in
the Southeast Valley.
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6.0 Conclusions & Recommendations
In order to remain competitive, the City of Chandler along with the DCCP needs to continue
to be proactive to promote the Downtown and its assets. The historic buildings are a
distinguishing feature that define the Downtown and elevate the area above the
competition. At the same time, efforts must be taken to incentivize new development.
• The Arizona Department of Revenue lists four properties in Chandler that are subject
to the Government Property Lease Excise Tax (GPLET) including 55 N. Arizona Place
(The Jonathan office building), Olympus Steelyard, Overstreet, and Overstreet
Cinema. Legislation passed over the last ten years has made it more difficult for
property owners to benefit from the GPLET. Excise tax payments are set by statute
and increase annually according to a construction cost index. However, if a property
is located within a central business district and a redevelopment area, it can receive
an eight-year abatement of all GPLET payments (a 2024 bill to reduce the abatement
to four years was vetoed by the Governor). The city may want to consider this option
of establishing a central business district and redevelopment area to further
incentivize development in the Downtown.
• We understand that a strategic plan for DCCP is underway with Progressive Urban
Management Associates (PUMA). This effort will help to further optimize services in
the Downtown and eliminate duplication of services provided by the city or others.
Funding for DCCP will also be evaluated. The strategic plan is likely overdue.
• We understand the city does not track sales tax revenue generated within the
Downtown. We recommend the city establish a process to collect sales tax data
which would assist in evaluating the status of the local market, the breakdown of
revenue from different categories (retail, restaurants, hotels, etc.), and where efforts
should be directed at attracting certain uses.
• The City of Chandler has a few incentive programs targeting redevelopment of
obsolete commercial properties. The Infill Incentive Program provides fee waivers,
expedited building plan review, and reimbursement of public infrastructure costs for
qualifying projects within the infill incentive area which is that part of the city north of
the Loop 202. The program targets existing commercial buildings at least 15 years old
with high vacancy rates. While the program is well designed, perhaps it could be
expanded to vacant/undeveloped commercial properties that have limited or no
demand for commercial use.
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The city’s Adaptive Reuse Program targets buildings built before 1990 with a
maximum size of 15,000 square feet within the Adaptive Reuse Overlay District which
is situated along Arizona Avenue (from Pecos to Warner Roads) and Chandler
Boulevard (between Alma School and McQueen Roads). The incentives for the
programs are designed to reduce the cost of redevelopment and allow for flexibility
in the city’s building regulations such as setbacks, parking, screening, and
landscaping.
We would hope that the portions of the Infill Incentive Program could also be used for
adaptive reuse applications as well. Adaptive reuse projects often encounter
infrastructure issues as well that may qualify for reimbursement. The city may also
give consideration to increasing the maximum size of the adaptive reuse beyond
15,000 square feet and reducing the age of the building. The City of Phoenix allows
adaptive reuse on buildings built before 2000 and up to 20,000 square feet in size.
• Development of additional housing opportunities in the Downtown are critical to its
continued growth and success. Projects such as One Chandler will provide a
dramatic entrance into the Downtown area as well as a large population base. The
Downtown Region has a wide variety of housing products, from public housing to low-
income housing tax credit complexes to market-rate multifamily units. The housing
types that should be promoted are:
➢ Additional multifamily complexes as the market dictates and as vacancy rates
decline.
➢ “Middle Income” housing that provides opportunities for critical service
employees such as police officers, firefighters, teachers, nurses, and others.
The Commonwealth Townhome complex on Commonwealth Avenue is an
example of the type of ownership housing that may be available for middle
income earners.
• Redevelopment plans should be developed for emerging redevelopment areas such
as the area west of Arizona Avenue between Boston Avenue and Frye Road. Without
some guidance, the fractured ownership pattern could lead to haphazard
redevelopment of parcels that may do little to enhance the Downtown area.
The neighborhood east of Arizona Avenue between Frye and Pecos Roads should also
be the subject of a redevelopment plan to stabilize the existing housing stock and
determine the future reuse of city-owned property.
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• Additional marketing efforts of the city and DCCP should focus on retail development
to provide better balance to the Downtown real estate market. In particular, a grocery
store option should be considered. Operators such as Aldi, which builds or leases
small 25,000 square foot stores, would be ideal to fill the absence of grocery services
in the Downtown District.