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The Phoenix CRE Brief - 5/21/2026
A brief summary of commercial real estate activity in the Phoenix Metro
Ramey Peru & John Finnegan
May 21, 2026
Executive Summary
Three key takeaways from new Phoenix Metro commercial real estate activity for the week of May 14 to May 21, 2026:
Industrial transaction velocity stayed robust at both ends of the size spectrum. US Merchants closed a $63.9 million owner-user acquisition in Surprise (453,960 SF at $140.74 per square foot), Belkorp Industries paid $44.15 million for an airport-adjacent infill Phoenix manufacturing facility (174,800 SF at $252.57 per square foot), and Dollar Tree took occupancy of a 1.2 million-square-foot West Valley distribution hub valued at roughly $147 million ($122.50 per square foot). The barbell pricing confirms institutional capital is willing to pay a steep premium for specialized infill power and air-cargo proximity while still underwriting mega-box logistics at or near replacement cost.
Office fundamentals quietly inflected positive even as institutional capital targeted obsolete stock at deep discounts. The Colliers Q1 2026 office report shows a second consecutive quarter of positive net absorption (approximately 432,379 SF), direct vacancy down 60 basis points to 14.5 percent, Class A direct vacancy down 40 basis points to 19.1 percent, and more than 335,000 SF removed from inventory across three buildings sold for repurposing. Trophy product continued to clear, with Biltmore Fashion Park's repositioned office building reaching 100 percent occupancy, while LXP Industrial Trust paid $103 million ($163.96 per square foot) for the 628,192-square-foot former University of Phoenix headquarters campus, a long-duration covered-land play priced well below replacement cost.
The TSMC gravity well continues to reshape North Valley land and hospitality demand. Common Bond Development Group unveiled The Shops at Halo Vista (11 acres of retail anchored by a 253-key dual-branded Marriott) immediately adjacent to TSMC, while the Goodyear City Council unanimously approved a four-story dual-branded Hilton on 35 acres at McDowell and Bullard. Both signal a clear pivot from concept to vertical execution on the hospitality side of the West Valley industrial story.
Land
Mattamy Homes Acquires 70 Homesites at Del Rio Ranch in Avondale for $6.37M Brief Glance (May 18, 2026) North America's largest family-owned homebuilder added 70 finished lots within the established Del Rio Ranch master plan in Avondale, reinforcing the Southwest Valley's role as the residential support node for the Goodyear and Buckeye industrial corridors.
Sale price: $6,370,000 for 70 homesites
Price per finished lot: $91,000
First Model Homes Open at Teravalis AZ Big Media (May 15, 2026) Howard Hughes opened the first model homes at Teravalis, marking initial vertical activation of one of the largest land assemblages in the United States and an important milestone for West Valley land basis comparables.
Multifamily
NexMetro Debuts 229-Unit Avilla Bella Camino Build-to-Rent Community in San Tan Valley Connect CRE (May 15, 2026) NexMetro Communities launched pre-leasing on Avilla Bella Camino, a 229-home luxury build-to-rent community on 22 acres near Gantzel Road and Bella Vista Road. The horizontal-format project features one-, two-, and three-bedroom detached homes ranging from 690 to 1,265 square feet and underscores how institutional capital is pushing BTR deeper into Pinal County as the inner East Valley becomes land-constrained.
Program: 229 units across 22 acres
Density: approximately 10.4 units per acre
Avala Luxury Rental Home Community Breaks Ground in Scottsdale AZ Big Media (May 20, 2026) A new Class A horizontal-format rental community broke ground in Scottsdale, targeting the affluent renter-by-choice demographic that has absorbed Class A high-rise product across the north Scottsdale corridor.
Sonora West Development Launches Two Luxury For-Sale Communities AZ Big Media (May 19, 2026) Two new gated luxury for-sale communities launched in the Scottsdale and Paradise Valley trade area, with home pricing ranging from $2.5 million to $10 million. The launches confirm that ultra-luxury for-sale absorption remains a viable thesis at the top of the housing stack and provides directional support for adjacent Class A rental product.
Chandler Records Sharpest Drop in Renter Mobility Among the Top 100 U.S. Cities AZ Big Media (May 20, 2026) A PropertyShark study found Chandler posted the steepest renter mobility decline of any major U.S. city, a 7.46 percentage-point drop. The structural drop in turnover is a meaningful underwriting input for stabilized Class A and B Chandler owners, supporting renewal pricing discipline and reduced concession reliance.
Renter mobility decline: 7.46 percentage points, the largest among the 100 largest U.S. cities
Major Changes Submitted for Mixed-Use Site at 59th Avenue and Dobbins in South Phoenix AZBEX (May 19, 2026) RAI Holdings is seeking to modify the existing zoning stipulations on the 38.96-gross-acre site originally entitled in 2022 as Matrix at Dobbins. The revised plan, now branded 59th & Dobbins, calls for 360 traditional multifamily units on the residential parcel (Lot 2) at a density of approximately 24.83 units per acre, plus a retained retail town center on Lot 1.
Program shift: from 207 apartments plus 197 BTR units to 360 traditional apartments
Density: approximately 24.83 dwelling units per acre
NexMetro Communities Continues Phoenix Expansion AZ Big Media (May 16, 2026) NexMetro confirmed continued Phoenix-area expansion with additional community deliveries and a forward pipeline aimed at filling the supply gap created as Q1 2026 multifamily deliveries hit a four-year low.
Industrial
US Merchants Pays $63.9M for 453,960-SF Industrial Building in Surprise AZ Big Media (May 20, 2026) Consumer goods and packaging manufacturer US Merchants acquired Building One at West Summit at Surprise from developer Mohr Capital for its second Phoenix metro location. The building delivers 36-foot clear heights, 101 dock doors, 144 trailer parking stalls, BNSF rail service, and Foreign Trade Zone status.
Sale price: $63,887,560 for 453,960 SF
Price per square foot: approximately $140.74
Address: 13401 W. Sweetwater Avenue, Surprise
Belkorp Industries Acquires 174,800-SF Phoenix Industrial Property for $44.15M Commercial Real Estate Direct (May 20, 2026) Vancouver-based Belkorp Industries purchased a 174,800-square-foot advanced manufacturing facility at 3809 E. Watkins Street in the Sky Harbor submarket from LBA Realty. The property, built in 1996 and renovated in 2018, is fully occupied on a corporate-guaranteed lease and features heavy 8,000-amp power supporting advanced manufacturing and pharmaceutical distribution operations.
Sale price: $44,150,000 for 174,800 SF
Price per square foot: approximately $252.57
Address: 3809 E. Watkins Street, Phoenix
Dollar Tree Opens 1.2-Million-SF West Phoenix Distribution Center at Park303 Connect CRE (May 18, 2026) Dollar Tree took occupancy of a 1.2-million-square-foot regional distribution center in the West Valley valued at approximately $147 million, serving roughly 700 stores across Arizona, Colorado, Nevada, New Mexico, and Utah. The asset sits within the 3.8-million-square-foot Park303 logistics park and includes outdoor employee amenity areas designed to support recruitment and retention in a tight blue-collar labor market.
Transaction value: approximately $147,000,000 for 1.2 million SF
Price per square foot: approximately $122.50
Address: 7200 N. Sarival Avenue, Phoenix
Pecos 17 Neighborhood Flex Bay Campus Nears Completion in Mesa AZ Big Media (May 2026) Scottsdale-based Cavan Commercial is wrapping construction on Pecos 17, a 12-building, 168,000-square-foot for-sale neighborhood flex-bay campus along East Pecos Road within the Pecos Advanced Manufacturing Zone. The project offers 21 individual units between 6,338 and 15,802 interior square feet, private outdoor owner yards up to 75,204 square feet, multiple grade-level doors, heavy power, and shared truckwells, targeting owner-users among local trades and small-to-medium manufacturers.
Project: 168,000 SF across 12 buildings (21 units)
Format: for-sale small-bay industrial for owner-users
KPPC Advanced Chemicals Breaks Ground on $120M Casa Grande Campus AZ Big Media (May 19, 2026) KPPC Advanced Chemicals broke ground on a $120 million advanced chemicals manufacturing campus in Casa Grande, reinforcing Pinal County's role as the southern anchor of the semiconductor supply-chain corridor along I-10.
Project value: $120,000,000
Location: Casa Grande, Pinal County
Sundt Construction Acquires Industrial Power Solutions AZ Big Media (May 19, 2026) Tempe-based general contractor Sundt closed on the acquisition of Industrial Power Solutions, an Arizona electrical contractor. The vertical-integration move is squarely aimed at controlling the power-delivery bottleneck that now sets the rate-limiting schedule on industrial and data center projects across the Valley.
Midyear Outlook for Phoenix Industrial Investment AZ Big Media (May 14, 2026) A new midyear market outlook reaffirms Phoenix as a top-tier U.S. industrial market, citing semiconductor-driven absorption, declining vacancy, and a contracting new-construction pipeline as the dominant themes for the balance of 2026.
Retail
Toy Barn Breaks Ground on 8th Valley Location in North Phoenix AZ Big Media (May 18, 2026) Specialty automotive retail and storage operator Toy Barn broke ground on its eighth Valley location along the Dove Valley Road corridor in North Phoenix, immediately adjacent to the Halo Vista and TSMC commercial ecosystem. The new location is targeted to open in July 2026.
Opening target: July 2026
Location: Dove Valley Road corridor, North Phoenix
Bella Storia Commercial Component Reviewed in Gilbert AZBEX (May 19, 2026) Municipal review advanced on the commercial component of the Bella Storia master plan in Gilbert. Integrating walkable, community-scale retail into large suburban master plans is increasingly standard practice in the East Valley as municipalities push to localize the tax base and reduce vehicular dependency.
Office
Biltmore Fashion Park Office Building Reaches 100 Percent Occupancy AZ Big Media (May 20, 2026) The repositioned 30,000-plus-square-foot Class A office building at 24th Street and Camelback Road, located above The Capital Grille, Ralph Lauren, and Herman Miller, reached full occupancy. VanTrust took the second floor in a relocation from existing Phoenix space, and Phoenix Design One (PDO) joined the roster alongside existing tenants Smead Capital Management and the asset's owner.
Building size: more than 30,000 SF Class A
Status: 100 percent occupied
Strong Leasing and Inventory Reductions Fuel Phoenix Office Market Health AZ Big Media (May 19, 2026) Expanded coverage of the Colliers Q1 2026 Phoenix office report confirms a second consecutive quarter of positive net absorption (approximately 432,379 SF), direct vacancy down 60 basis points to 14.5 percent, and Class A direct vacancy down 40 basis points to 19.1 percent. Three buildings sold during Q1 are slated for repurposing, removing more than 335,000 SF from inventory once construction starts. Q1 2026 office sales volume reached $353 million, down 33.3 percent quarter over quarter but up 53.7 percent year over year, anchored by a 5-property suburban Class A portfolio trade at $61.5 million (296,663 SF, approximately $207 per square foot) and the Thirty 03 office tower at $32.25 million.
Direct vacancy: 14.5 percent (down 60 basis points)
Class A direct vacancy: 19.1 percent (down 40 basis points)
Q1 sales volume: $353 million (up 53.7 percent year over year)
Inventory removed in Q1: more than 335,000 SF across three buildings
Phoenix Office Market Shows Strength: Q1 2026 Colliers Report Connect CRE (May 18, 2026) The Colliers Q1 2026 office report confirms continued capital concentration in premium Class A nodes (Camelback, Tempe Town Lake, Scottsdale Quarter, and the Esplanade) alongside accelerating removal of obsolete commodity stock for residential or industrial conversion. The shrinking denominator is now visible in the headline vacancy figure rather than relying on rent growth in the existing stock as the recovery mechanism.
LXP Industrial Trust Acquires Former University of Phoenix Headquarters for $103M Hoodline (May 20, 2026) LXP Industrial Trust executed an all-cash $103 million acquisition of the former University of Phoenix headquarters campus, a 628,192-square-foot, six-building Class A complex at Broadway Road and 32nd Street built in 2006 on 37.11 acres. The University of Phoenix remains a reduced-footprint tenant in approximately 82,000 SF. The pricing reflects a steep discount to current replacement cost on mid-rise structured-parking office product, providing meaningful long-duration optionality for re-tenanting, holding, or future adaptive reuse.
Sale price: $103,000,000 for 628,192 SF
Price per square foot: approximately $163.96
Implied land basis: approximately $2.77 million per acre, or roughly $63.72 per land square foot, on 37.11 acres
Mixed-Use
Common Bond Development Group Announces The Shops at Halo Vista AZ Big Media (May 18, 2026) Common Bond Development Group unveiled The Shops at Halo Vista, an 11-acre retail and hospitality destination at the northwest corner of I-17 and Dove Valley Road, immediately adjacent to TSMC and the broader 2,300-acre Halo Vista master plan being developed by Mack Real Estate Group and McCourt Partners. The program features curated lifestyle retail, patio-oriented dining, and a 253-key dual-branded Marriott (Courtyard and Residence Inn). Vertical construction on the hotel and retail components is targeted for November 2026.
Site: 11 acres
Hotel program: 253 keys, dual-branded Courtyard and Residence Inn by Marriott
Construction start: November 2026 (targeted)
How the Development Boom Gave New Life to Downtown Phoenix AZ Big Media (May 20, 2026) A long-form feature documents the residential, retail, and office activity reshaping Downtown Phoenix, contextualizing the Empire Group Arro twin-tower project and the broader high-rise pipeline currently underway in the urban core.
Hotels
Hospitality Capital Partners Acquires 5-Hotel Sonesta Portfolio for $72M AZ Big Media (May 19, 2026) Hospitality Capital Partners closed on a five-hotel Sonesta-branded portfolio for $72 million, the largest hotel trade reported in the Phoenix metro during the week. The acquisition signals scale-driven entry by a new sponsor. Per-key and per-property valuation metrics are not yet disclosed in published coverage.
Portfolio size: 5 Sonesta-branded hotels
Aggregate sale price: $72,000,000
Goodyear City Council Approves Dual-Branded Hilton in Downtown Corridor Your Valley (May 20, 2026) The Goodyear City Council unanimously approved rezoning to allow a four-story, dual-branded Hilton project (Homewood Suites and Hilton Garden Inn) on a 35-acre site at the northeast corner of McDowell Road and Bullard Avenue. Developer Wealth Hospitality benefits from a height entitlement increase to 56 feet, opening capacity to serve a market that is currently underserved relative to its rapid commercial and spring-training-driven demand.
Site: 35 acres at McDowell Road and Bullard Avenue, Goodyear
Program: two Hilton-family flags side by side (Homewood Suites and Hilton Garden Inn)
Connect With Us
We connect with landowners and developers across the Phoenix Metro every day. Whether you are recalibrating land basis in the West Valley or Pinal County, weighing an office-to-industrial or office-to-residential redevelopment play, underwriting a stabilized industrial, retail, or multifamily acquisition, or working through entitlement, power delivery, and infrastructure friction on a mixed-use site, we are available for confidential conversations about how the activity in this brief may affect your business and your pipeline. Reach out to start the conversation.
John Finnegan Senior Vice President | Land (602) 222-5152 | Ramey Peru Senior Vice President | Land (602) 222-5154 |