Medtech Firm Expands at Phoenix Office Campus

I.D.E.A. Tempe. Image courtesy of CBRE

Becton, Dickinson and Co. has brought its Greater Phoenix office footprint to nearly 153,000 square feet. The medical technology company signed a 165-month, 32,917-square-foot lease expansion at I.D.E.A. Tempe, a 1 million-square-foot, phased development in Tempe, Ariz. CBRE negotiated the deal on behalf of the landlord, The Boyer Co.

Following the expansion, BD will occupy five of the six floors of the project’s first phase, a 185,000-square-foot Class A office building that came online in March 2020. Boyer broke ground on the development in 2018, financing the construction with a $57.4 million loan from Wells Fargo Bank, according to CommercialEdge data.

As the building’s original tenant, BD Peripheral Intervention initially leased 120,000 square feet across four floors. The new contract brings the property’s occupancy to 97.4 percent, according to a release. CBRE’s Sean Spellman and Lauren Lovell arranged the transaction.

I.D.E.A. = Innovation, Discovery, Education and Arts

Designed to become a biotechnology campus, I.D.E.A. Tempe is taking shape at 850 W. Rio Salado Parkway, on an 18-acre site that used to be an industrial brownfield. Boyer teamed up with SmithGroup and Okland Construction to bring the project to fruition.

At full buildout, the campus will comprise five office buildings with restaurant and retail space, two parking structures and 40,000 square feet of arts rehearsal and classroom space. Other on-site potential construction could include more restaurant and retail spaces, as well as a hotel or multifamily development.

Matt Jensen, partner at Boyer, said in a prepared statement that the firm is planning the second office building at the property, which will feature open floorplans and covered parking.

The development site is roughly 10 miles southeast of downtown Phoenix in the Tempe Mill submarket, near Tempe Town Lake and the Tempe Center for the Arts. The location is also 2 miles west of a $1.8 billion, 3.5 million-square-foot mixed-use development to unfold in several phases over a 15-year period.

A strong submarket for office leases

After a couple of months of betterment, Greater Phoenix’s office market saw a small rise in vacancy rates, according to CommercialEdge. The metro’s index clocked in at 15.5 percent as of February, marking a month-over-month increase of 60 basis points, as well as a year-over-year decrease of 280 basis points. The value was also below the national average rate of 15.7 percent.

Tempe Mill, a submarket with an office inventory of nearly 4.5 million square feet, has constantly maintained some of the lowest vacancy rates in The Valley. Its February index was at 4.3 percent, almost unchanged from January.

The submarket is also home to one of the market’s priciest office properties for listing rates. The 287,000-square-foot 100 Mill, a development of Hines and Cousins Properties, had the full-service equivalent rate of $50.50 per square foot as of February.