The city of Chandler is located in the southeast portion of the Phoenix-Mesa-Glendale metro area. The local population in the city totals more than 260,000 residents, and is expanding at a pace of nearly 2 percent annually, faster than the state average as a whole. The city is the fourth largest in Arizona by population, trailing only Phoenix, Tucson and neighboring Mesa. Of the top-5 cities in Arizona, Chandler is by far the fastest-growing city in the group.
Businesses, particularly those in the high-tech segments of the economy, looking to establish a presence in Arizona due to the state’s pro-business climate and affordable cost of living consistently target Chandler to attract the talent they need to run their enterprises. The most prominent technology company in the area is Intel. The chip giant is the largest employer in Chandler (and one of the largest employers in the state), with approximately 11,900 workers in the area.
Other established technology companies operating in Chandler include eBay/PayPal (2,000 employees), Microchip Technology (1,500), Orbital Sciences (1,400), Avnet (750) and Mitel (450). One of the overriding themes in the Chandler economy has been the growth associated with technology companies. Simply put, the presence of existing technology companies attracts additional businesses that act as suppliers, competitors or joint-venture partners.
In addition to a deep collection of technology companies, the city of Chandler has a diversified group of large local employers, with many financial services businesses forming significant presences in the area. Both Bank of America and Wells Fargo have campuses in the city that employ thousands of workers. Wells Fargo expanded its campus expanding in the second half of 2015, relocating some existing workers from other parts of the Valley. Nationstar Mortgage moved into Chandler a few years ago, bringing 1,000 new workers to the area.
Chandler consists of two primary commercial districts: the Price Road Corridor and the Chandler Airport area. Both of these areas have been significant development hubs in recent years and each area has attracted healthy tenant demand for office and flex space.
The Chandler Airport area has a diverse mix of employers, including Isagenix, Merrill Lynch, and population-serving companies in industries such as financial services, real estate, education and healthcare. These sectors should thrive as the local economy gains momentum, particularly as the housing market—which has long been a driver of growth in the Greater Phoenix suburbs—gains momentum.
The Price Road Corridor is popular with the growing Chandler tech employment base. The ASU Research Park, which is operated by the university, has businesses including Avnet and Digital Realty Trust among its tenants, and in recent quarters Amkor, Go Daddy and ViaSat have committed to significant blocks of space in the Park. These businesses are bringing hundreds of high-tech/high-wage jobs to the area.
There have been a few spec projects that have delivered in recent years. The 133,135-square foot Chandler 202 project is a Class B office building that was built in 2015. Current vacancy in the building is approximately 24 percent, with asking rents ranging from $28-$29 per square foot. Republic Services leased more than 74,000 square feet in Chandler 202 in 2016, and other tenants include Insys Therapeutics and Cardinal Financial.
The Douglas Allred Company has been an active developer in the area. The Allred Park Place Central Campus will ultimately total more than 1 million square feet in office and flex space. Building 10 in the park was delivered in late-2015, with 92,450 square feet. Orbital Sciences has leased half the building and the other half is available for lease. Building 4 of this project was leased to Infusionsoft, but the 100,622-square foot facility is available for sublease.
Chandler Amenities Overview
The Chandler market consists of approximately 13.8 million square feet of retail space, headlined by the 1.2-million square foot Chandler Fashion Center, which opened in 2001 at the intersection of Price Road and Chandler Boulevard. Dillard’s and Macy’s are the two largest tenants at Chandler Fashion Center and the mall also includes one of two Nordstrom Stores in Arizona. The mall features dozens of shops and restaurants, as well as a 20-screen Harkins Movie Theatre.
The Chandler retail market is growing, leading to a surge in amenities for local residents. Net absorption of retail space in Chandler has been positive in 11 of the past 12 quarters, totaling more than 1 million square feet in that time. Some of the absorption was the result of the 356,000- square foot Phoenix Premium Outlets, which came online in 2013 near the Gila River Wild Horse Pass Casino. This is the most significant retail delivery in recent years, and the project has outlet stores for such high-end retailers as Brooks Brothers, Hugo Boss, Kate Spade New York, Saks Fifth Avenue and Armani.