Onsemi leases large office space in Scottsdale for new corporate headquarters

Onsemi leases large office space in Scottsdale for new corporate headquarters

Article Originally Posted By PhoenixBusinessJournal On August 1, 2022

Phoenix-based Onsemi (Nasdaq: ON) has leased about 175,000 square feet of office space in Scottsdale, with plans to sell its existing Phoenix campus.

The company will be relocating its corporate headquarters to the McKesson office development on Pima Road, the semiconductor supplier confirmed.

A timeline for move-in is "as soon as possible" but an exact date, however, is still to be determined, said Gary Pugsley, vice president of facilities; environment, health and safety; and business continuity for Onsemi.

Puglsey said the current headquarters is more than enough space for the company's Phoenix workforce, adding that it wanted to be in more of a modern, environment-friendly building, as well as one that better accommodates its employees.

"It's going to be a much better work environment than where we're currently at. I personally cannot wait to get over there, and there's a lot of us that feel the same way," he said. "Moving from a 1955-built building to a 2018 building is a significant change in environment."

Onsemi owns its current headquarters and research and design campus at 5005 E. McDowell Road in Phoenix. The property makes up more than 1.4 million square feet of land, according to the Maricopa County Assessor's Office. The company makes computer components and sensors that end up in cars and industrial equipment, two end-markets that make up a sizable portion of the world's greenhouse gas emissions.

Scottsdale office space

The new Scottsdale office space will be able to accommodate about 1,000 employees, which is a little more than Onsemi's current local employee count, according to the company. Onsemi is hiring for 179 jobs across its Valley operations.

The headquarters will primarily be an office building with a few small electronic labs on site, according to the company. No manufacturing will be done at the site of the new office.

The new office is a good geographic fit for Onsemi's new headquarters and worked well for employees, Pugsley said. Sites in Mesa, Phoenix and Tempe were also considered, he said.

The new Scottsdale office is about 10 miles northwest of the current location in Phoenix.

Onsemi doesn't currently have a general contractor to do the build out of the new office space. It is currently out to bid to contractors. Onsemi tasked Phoenix-based Gensler as its architect.

Selling the current campus

The company is in negotiations to sell the remainder of its Phoenix campus, which at one point totaled 100 acres.

An entity linked to Onsemi on July 1 sold 4.95 acres in Phoenix to Chicago-based Iron Mountain Data Services LLC for just under $6 million, according to Maricopa County land records. Puglsey said that was a piece of the 100 acres Onsemi once controlled. He said there are roughly another 40 acres left to sell as of Monday.

Cushman & Wakefield's Mike Beall told the Business Journal that he represented Onsemi in a lease at 5601 and 5701 N. Pima Road at the McKesson building — located near Loop 101 and northwest of Scottsdale Community College. Pugsley declined to disclose details of the lease the company signed.

In Cushman & Wakefield's Q2 2022 report on the Phoenix office market, Onsemi — listed under its previous known name ON Semiconductor — had the top lease of the quarter.

The McKesson campus has three separate addresses at the property, which is owned by Griffin Capital Essential Asset REIT Inc, according to previous Business Journal reporting. Zelle has signage on the side of the building at 5801 N. Pima Road.

Onsemi reported record revenue for its second quarter that ended June 30, which totaled more than $2 billion in Q2 and up 25% from the same period last year, the company said in its Q2 earnings call on Monday.