Construction wraps up on north Scottsdale spec office building

Construction wraps up on north Scottsdale spec office building

Article Originally Posted on Phoenix Business Journal on April 21, 2021

Axis Raintree, a 175,112-square-foot speculative office building, developed as a partnership between Trammell Crow Co. and PGIM Real Estate completed construction.

The building began construction in October 2019 on one of the last infill office sites in the Scottsdale Airpark submarket. The project is on a 5.12-acre site near Raintree Drive and 87th Street.

“We’re thrilled to partner with Trammell Crow Company to bring Axis Raintree to the market at a critical time for the office sector, as corporate tenants have a renewed interest in and need for best-in-class space,” Soultana Reigle, managing director and senior portfolio manager for PGIM, said in a statement. “With its outstanding location and amenities, Axis Raintree is poised to benefit from pent-up demand for premier office space in the Phoenix area driven by favorable regional market dynamics, such as robust job growth, population gains and a business-friendly climate.”

PGIM is the real estate investment and financing arm of Prudential Financial’s global investment management business.

Bryan Taute and Charlie Von Arentschildt of CBRE Group Inc. are the leasing brokers for the building. No leases have been signed yet.

“More than ever, tenants are focused on providing a premium workplace experience for their employees,” Taute said in a statement. “As companies return to work, we feel strongly that newly developed buildings like Axis Raintree that can offer modern design, amenities and safety features will be in popular demand.”

Outoor amenity space

The building was designed by RSP Architects and was constructed by Willmeng Construction. It includes 5,000 square feet of outdoor, Wi-Fi-enabled amenity space and a 1,500-square-foot tenant lounge.

“TCC Phoenix and PGIM Real Estate are pleased to deliver Axis Raintree to the North Scottsdale submarket, which for years has had a limited supply of new Class A office space,” Cullen Mahoney, vice president for TCC Phoenix, said in a statement. “We are seeing a meaningful flight to quality trend from tenants as they begin to re-enter the office. We expect well-located, best-in-class projects like Axis Raintree to significantly outperform moving forward.”

The building comes online as few big office leases are being executed in the Valley as the effects of the pandemic continue. The Valley just completed four consecutive quarters of negative net absorption, and overall asking rents decreased to $28.07 per square foot, according to CBRE research.

The Northeast Valley submarket, which includes the Scottsdale Airpark, had 738,111 square feet of office space come online during the first quarter, and saw submarket vacancy increase to 19.84%, according to CBRE research. The submarket saw negative net absorption of -50,058 square feet during the first quarter, meaning more tenants moved out, put space up for sublease or decreased their footprints, than new tenants leased or expanded their space.