Marina Heights: Developing Arizona’s Largest Office Project

Marina Heights is a massive, impressive project sitting directly across from Arizona State University’s Tempe Campus and alongside the Hayden Ferry Lakeside. Five buildings totaling 2 million square feet comprise the campus, which is a leased solely to State Farm – one of three campuses outside its Bloomington, Indiana, headquarters. Two others are located in Dallas and Atlanta.

The project was a co-development between the Ryan Companies and Sunbelt Holdings, a Southwest leader in development, management and investment.

Ryan Companies and Sunbelt Holdings happened upon the project and deal in 2012 as State Farm was looking for space in the market. State Farm’s initial request for 800,000 square feet grew to 1 million, and then 1.5 million before settling at the 2 million mark. Now, $600 million in construction costs (the developers not only co-developed the project, they did the construction too) and four years later, the project is in its final phases of delivery.

Attendees at NAIOP’s Commercial Real Estate Conference 2016 had an exclusive tour of the project led by developer and State Farm executives, walking the project and learning what makes this massive development – the largest in Arizona’s history – tick.

Among the most notable points about the development:

  • When fully occupied, 8,000 State Farm employees will be on-site. Today there are 4,000, 60 percent of which are call center employees.
  • It’s a 24×7 campus, and Saturdays happen to be the busiest days for the call centers. These less traditional work hours for a business campus ease traffic and parking woes – although parking is no issue at 4.15 per thousand square feet. There are 3,000 underground parking spots, and 8,500 spaces throughout the entire campus.
  • During the first two years of construction, concrete was poured every single night (it’s too hot in Arizona to pour during the day) – that’s 31,000 concrete trucks worth of concrete.
  • Ryan Companies’ construction trailers during the project temporarily created one of the company’s largest spaces – 17,000 square feet of trailer office space to be exact. Ryan brought in employees from their 12 offices nationwide throughout the project and worked with a valuable team of subcontractors.

Ryan executives say State Farm was an ideal client, with few tricky requirements that challenged the developers. Among the requests: State Farm opted not to run the food service, so Ryan and Sunbelt hired a concessionaire to manage that aspect, covering everything from on-site Starbucks to “grab and go” to catering, vending and cafes. Talks are underway with restaurants to locate on the campus, and all food options are fully open to the public. State Farm also asked the developers to engage a health club facility (a 16,000 square foot, two-level facility is in the works), and a 6,000 square foot medical office family clinic is next. Together, the developers envision the food service, health club and medical facility creating a wellness program for the campuses’ employees.

As in any real estate project, location is key. Marina Heights is located on Hayden Ferry Lake, an ASU architectural project in the 1990s, and it sits along a Tempe City park. It’s an active area, hosting Iron Man competitions, on-water yoga classes and various weekend events. The campus is a short walk from public transit and offers plentiful walking paths. Its neighbor, Arizona State University, is the largest university in the U.S. with 65,000 students, and the State Farm campus is credited with creating an environment that portrays Tempe as an urban, walkable and mass transit-oriented community.

The campus is immediately next to a Parkways Properties portfolio that is a growing home to technology companies that are primarily relocating or expanding from Silicon Valley and San Francisco. Parkway built the portfolio between 2010-2013 – a tough time in the Tempe market. At the time, asking rental rates were $25 per square foot and Class A vacancy was peaking at 25 percent. Today, asking rental rates are north of $45 per square foot and Class A vacancy is 3 percent.

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2 Responses

  1. Congratulations to everyone involved in designing, building, and delivering this impressive commercial/corporate-use property. If I may respectfully correct something in this publication that is surely relevant to some, and perhaps even to many, State Farm Insurance Company is NOT headquartered in Indiana. The Central ILLINOIS Twin-Cities community of Bloomington-Normal is home to both Illinois State University (ISU) AND State Farm Insurance Company. While their address is technically on their own short ‘State Farm Plaza Drive’ (or some variant of that), both their World Headquarters and Regional Corporate Offices are located approximately two miles apart, both really on Veterans Parkway. Driving into the fairly large metropolis the area has become, by way of Veterans Parkway, one would first come upon the large and prominent Headquarters of State Farm after driving just a couple of miles.

    And because I am personally a graduate of the great Construction Engineering Technology/Construction Management program from right nearby at ISU, I can share a very interesting point of fact on which we became very studied (only doing so because you, like me, are AEC and O&M professionals): State Farm’s Midwest States’ Regional Office is considerably larger than their World Headquarter buildings. However, the Regional Office came many years (decades) later than the proud Headquarters they call home. They, of course, didn’t want the Regional Office building to appear larger than the Headquarters, but for their own business reasons, they required a considerably greater number of square footage for the new Regional building. Architects were tasked with the difficult challenge of creating a building that is in fact bigger, but looks smaller. The two would be at a proximity to one another that inevitably was going to lead to frequent comparison. Without wanting to go on writing here on what is not my original post, I won’t continue into further detail. And I sure do not mean to do anything but offer a respectful correction, which, knowing the audience, led me to want to share this quick “design/build” history. So, after unfortunately having to recover and rebuild Masonry block walls that were (twice) blown over by near-tornado windstorms, the project was ultimately a great success. The unique square footage demands were met and the illusion of smaller size was impressively achieved.

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