Tempe, Arizona, February 12, 2026
The sale of Rio West Business Park in Tempe for $61.5 million reflects the growing confidence in the Phoenix commercial real estate market. This transaction showcases the region’s ability to attract investment and highlights the robust business environment in Arizona. With ongoing developments and a commitment to supporting entrepreneurs, Phoenix stands poised for continued economic growth and resilience amidst challenges faced by other markets.
Phoenix: Tempe Office Park Sale Fuels Regional Economic Optimism
A recent $61.5 million transaction for Rio West Business Park underscores the greater Phoenix area’s dynamic commercial real estate market and robust business climate. This significant sale reflects an ongoing trend of robust private investment and entrepreneurial confidence that continues to drive economic growth across the Valley.
Phoenix stands as a beacon of opportunity, where a supportive environment for Arizona AZ entrepreneurs and a resilient Phoenix small business sector are key drivers of prosperity. The latest real estate activity in Tempe is a testament to the region’s ability to attract and sustain substantial capital, signaling continued confidence in its economic future. This vibrant market demonstrates the power of innovation and strategic development in fostering a thriving local economy.
Tempe’s Significant Office Transaction
The recent sale of a Tempe office park, specifically Rio West Business Park, for $61.5 million, highlights a noteworthy transaction in the local commercial real estate landscape. This significant deal was facilitated by CBRE, a prominent name in the real estate sector. The property located at 1921 West Rio Salado Parkway, Tempe, AZ 85281, is classified as a Class B building, originally constructed in 2006. It offers approximately 48,066 square feet of rentable office space, contributing to Tempe’s diverse office inventory. This investment reflects the sustained interest of capital in well-located and functional assets within the Phoenix metropolitan area.
Phoenix’s Expanding Commercial Real Estate Landscape
The greater Phoenix commercial real estate market is experiencing a significant surge, fueled by a combination of factors. Economic diversification, substantial population growth, and strategic infrastructure investments are collectively driving demand across various property types. The Phoenix metro area, home to over 5 million residents, saw an addition of nearly 50,000 new residents in 2023 alone, directly contributing to the heightened need for commercial properties. This growth extends to the industrial sector, where Phoenix holds the distinction of being the second-fastest-growing industrial market in the United States.
The office market, in particular, is showing signs of steady recovery following challenges experienced post-pandemic. Although vacancy rates were at 27.8% in the first quarter of 2025, they have been on a downward trajectory since late 2024. There is a strong and consistent demand for high-quality Class A office spaces, particularly in key submarkets like Tempe, Scottsdale, and Camelback. This demand is spurring landlords to enhance amenities and modify layouts to attract businesses. Average asking rents for direct leases were recorded at $29 per square foot in the first quarter of 2025, indicating a positive market adjustment. Investment sales through March 2025 reached $999 million across 62 properties, demonstrating robust investor interest. Experts anticipate an increase in transaction velocity in the latter half of 2025, with private equity and high-net-worth investors actively participating.
The city’s commitment to development is further evidenced by ongoing projects such as the South Pier at Tempe Town Lake, a substantial $1.8 billion mixed-use development. This project is planned to include 2,300 apartments, 1,600 condominiums, 520 hotel rooms, and more than 600,000 square feet of Class A business office space, complemented by a variety of restaurants and retail establishments. In Phoenix’s Norterra neighborhood, Trammell Crow Company’s residential subsidiary, High Street Residential, has commenced construction on Union Park Residences, a 308-unit multifamily project expected to be completed in the fourth quarter of 2027. Furthermore, Trammell Crow Company has also initiated the Akimel Gateway project, a Class A industrial development comprising five buildings totaling 519,000 square feet, with completion anticipated by December. These projects collectively contribute to a dynamic urban environment and a thriving commercial ecosystem.
Arizona’s Business-Friendly Environment
Arizona has cultivated a reputation as a highly desirable state for businesses, fostering a climate that encourages entrepreneurship and economic vitality. The state’s appeal is rooted in its lowered taxes, streamlined regulation, and comprehensive programs designed to support business success. These policies are fundamental to attracting companies of all sizes, ensuring they not only survive but thrive within the state’s borders.
Notably, Arizona boasts one of the nation’s lowest flat income taxes at 2.5%, and its corporate income tax rate of 4.9% is among the lowest in the U.S. Furthermore, businesses benefit from the absence of franchise tax, business inventory tax, estate tax, worldwide unitary tax, and gross receipts tax. This favorable tax structure, combined with a dedicated effort to reduce bureaucratic hurdles, makes it easier for new and expanding businesses to launch and grow without excessive regulatory burdens. Arizona was recognized as the 14th best state for entrepreneurs in 2025 by SimplifyLLC, marking an 11-spot improvement from the previous year. This improved ranking is attributed to strong new business growth, a robust job creation rate, and healthy consumer spending. The state is also recognized as the third most affordable state to live and operate a business by a USA TODAY study. WalletHub also positioned Arizona as the 9th best state nationwide to start a new business. The state’s rapidly growing and skilled workforce further enhances its attractiveness, drawing talent from various regions.
Insights into the Broader Economic Landscape
The economic resilience seen in Phoenix and Tempe stands in contrast to certain challenges observed in broader Nationwide real estate sectors. For instance, in late September, Fannie Mae initiated foreclosure proceedings on a $61.5 million loan associated with two multifamily properties containing nearly 500 units in New York City. This particular situation highlights a Nationwide issue with problem loans in the multifamily sector, emphasizing that while some markets face specific pressures, the Greater Phoenix area continues to demonstrate robust investment and sustained demand across many segments.
Phoenix’s office market experienced its first increase in sales price per square foot in over three years in 2025, rising from $165 per square foot in 2024 to $197 per square foot. This increase, coupled with Phoenix leading the nation in job gains across the finance, insurance, and administrative support sectors in 2025, underscores the area’s strong economic fundamentals. Office hubs in Scottsdale, Tempe, and Chandler are key to this momentum, offering appealing cost structures and access to a skilled workforce. This sustained growth reinforces Phoenix’s position as a dynamic hub for commercial real estate and economic growth.
Fostering Future Prosperity
The recent $61.5 million sale of Rio West Business Park in Tempe is more than just a transaction; it is a clear indicator of the robust confidence investors have in the Phoenix AZ business environment. This vitality is a direct result of continuous entrepreneurial innovation, strategic private investment, and a governmental approach that understands the benefits of limited regulation in fostering economic expansion. As Arizona AZ entrepreneurs continue to innovate and Phoenix small business ventures thrive, the region solidifies its reputation as a premier destination for commerce and investment. To sustain this positive momentum, continued support for local businesses, a commitment to sound economic policies, and engagement in community-driven development are essential for building a prosperous future.
FAQ
- What was the recent real estate transaction in Tempe?
- Rio West Business Park in Tempe recently sold for $61.5 million.
- Which entity was involved in the sale of the Tempe office park?
- CBRE was involved in the transaction.
- What is the address of Rio West Business Park?
- The address of Rio West Business Park is 1921 West Rio Salado Parkway, Tempe, AZ 85281.
- What is the current state of Phoenix’s commercial real estate market?
- Phoenix’s commercial real estate market is experiencing a dynamic surge driven by economic diversification, population growth, industrial expansion, evolving office and retail sectors, sustainability initiatives, and infrastructure investments.
- How much were the total investment sales in Phoenix through March 2025?
- Investment sales through March 2025 totaled $999 million across 62 properties.
- What is Arizona’s ranking for business friendliness?
- Arizona was ranked 4th for business friendliness by CNBC.
- What is the flat income tax rate in Arizona?
- Arizona has a 2.5% flat income tax, which is the lowest flat-tax in the U.S.
- What is Arizona’s corporate income tax rate?
- Arizona’s corporate income tax rate is 4.9%, which is among the lowest in the U.S.
- Did Phoenix’s office market see an increase in sales price per square foot recently?
- Yes, Phoenix saw its first increase in sales price per square foot in more than three years in 2025, rising from $165 per square foot in 2024 to $197 per square foot.
Key Features of the Tempe Real Estate Deal and Phoenix Market
| Feature | Detail | Scope |
|---|---|---|
| Property Sold | Rio West Business Park | Local (Tempe, AZ) |
| Sale Price | $61.5 million | Local (Tempe, AZ) |
| Broker Involved | CBRE | Local (Tempe, AZ) |
| Property Type | Office Park (Class B building) | Local (Tempe, AZ) |
| Rentable Office Space (1921 W Rio Salado Pkwy) | 48,066 square feet | Local (Tempe, AZ) |
| Phoenix CRE Investment Volume (March 2025) | $999 million across 62 properties | Local (Phoenix, AZ) |
| Phoenix Industrial Market Ranking | 2nd fastest-growing in the U.S. | National |
| Arizona Flat Income Tax Rate | 2.5% (lowest in the U.S.) | National |
| Arizona Corporate Income Tax Rate | 4.9% (among the lowest in the U.S.) | National |
| Phoenix Office Market Sales Price per Square Foot Increase (2025) | From $165 (2024) to $197 (2025) | Local (Phoenix, AZ) |
| Fannie Mae Problem Loan | $61.5 million loan on two New York City properties | Nationwide |
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Author: STAFF HERE PHOENIX WRITER
The PHOENIX STAFF WRITER represents the experienced team at HEREPhoenix.com, your go-to source for actionable local news and information in Phoenix, Maricopa County, and beyond. Specializing in "news you can use," we cover essential topics like product reviews for personal and business needs, local business directories, politics, real estate trends, neighborhood insights, and state news affecting the area—with deep expertise drawn from years of dedicated reporting and strong community input, including local press releases and business updates. We deliver top reporting on high-value events such as the Waste Management Phoenix Open, Cactus League Spring Training, and Arizona State Fair. Our coverage extends to key organizations like the Greater Phoenix Chamber of Commerce and Visit Phoenix, plus leading businesses in technology and healthcare that power the local economy such as Intel and Banner Health. As part of the broader HERE network, including HERETucson.com, we provide comprehensive, credible insights into Arizona's dynamic landscape.
