Tempe, February 6, 2026
A significant redevelopment project is underway in Tempe as Lincoln Property Co. transforms a long-vacant office building into a thriving industrial hub. This initiative, covering a single-story, 218,268-square-foot space originally built in 1977, signals a pivotal shift in the local commercial landscape, creating new job opportunities and fostering economic growth in the Phoenix area. With rising demand for industrial spaces, this project exemplifies the adaptability of local developers in leveraging existing assets to meet market needs and enhance the region’s economic resilience.
Tempe Transforms: Vacant Office Becomes Innovation Hub
A prominent developer is set to convert a long-vacant Tempe office property into a modern industrial site, signaling a significant shift in the region’s commercial landscape and new opportunities for Phoenix AZ business. This initiative highlights the adaptability and foresight of local entrepreneurs and investors, who are actively repurposing existing assets to meet the evolving demands of a dynamic market. This kind of private investment is crucial for sustained economic growth, demonstrating how strategic redevelopment can breathe new life into underutilized spaces and create pathways for new jobs and industrial innovation.
The project aligns with a broader trend of optimizing real estate to foster a robust economy. By transforming obsolete structures into functional industrial facilities, developers contribute to a more efficient and responsive market, benefiting Arizona AZ entrepreneurs and supporting the expansion of the region’s diverse industries. This thoughtful approach to development underscores the power of private sector leadership in shaping a prosperous future for the Phoenix metropolitan area.
From Office to Industrial: A Strategic Pivot
Lincoln Property Co., a prominent Valley developer known for its extensive commercial real estate solutions across Arizona, is leading a significant redevelopment project in Tempe. The company plans to transform a single-story, 218,268-square-foot office property, originally constructed in 1977, into a modern industrial facility. This vacant office building is located on the southeast corner of Elliot Road and Hardy Drive. This conversion marks a strategic shift from a traditional office environment to a dynamic industrial space, reflecting current market needs.
Meeting Evolving Market Demands
The decision to convert this Tempe office property into an industrial site is a testament to the changing landscape of commercial real estate. Nationwide, old suburban office parks are being reevaluated and repurposed for new uses. The office market in Phoenix, while showing signs of recovery with buildings gradually filling up, is also seeing landlords accommodating unexpected uses such as labs, training facilities, and corporate learning centers. Conversely, the industrial sector in Phoenix has maintained a strong construction pipeline, averaging 8 million square feet in quarterly deliveries since 2022, with 21.9 million square feet of new projects underway well into 2025. Phoenix was recognized as the second-fastest growing industrial market in the U.S. in 2022, and in Q1 2025, it was named the number one industrial market in the U.S. based on leasing volume, tenant activity, and market absorption. This strong demand is driven by its strategic west coast location, extensive highway networks, multiple airports, and proximity to Southern California, attracting companies in logistics, construction, and manufacturing.
Despite significant industrial construction, the market has experienced rising vacancy rates and slowing rent growth due to continued supply growth and increased sublease availability. However, direct net absorption remains positive as logistics and manufacturing tenants expand their operations. Tempe and Pinal County, specifically, have experienced some of the greatest rent increases year-over-year in the industrial sector. This strong demand makes the repurposing of existing, underperforming assets an attractive option. The adaptive reuse of underutilized office buildings, coupled with government support and comprehensive planning, could be a valuable tool in many local markets for addressing the need for more industrial spaces Nationwide.
Economic Upside for Tempe and Phoenix
This conversion project is poised to generate substantial economic benefits for Tempe and the wider Phoenix metropolitan area. Industrial developments typically lead to job creation, both during construction and through the operations of the businesses that will eventually occupy the new facility. The Phoenix metro area continues to attract high-impact corporate investments, with new headquarters and job creation plans driving economic momentum. Arizona added a record-breaking 24,285 new jobs in the first half of 2025, powered by $31 billion in combined public and private investment, with thousands of positions added in high-tech manufacturing, logistics, healthcare, and finance.
Such projects also strengthen local supply chains and enhance the region’s appeal as a hub for distribution and manufacturing. The state of Arizona ranks number one nationally for semiconductors, with over 60 industry expansions since 2020, fueled by significant investments. This growing manufacturing base contributes to Phoenix having one of the largest manufacturing supply chains in the country, with over 2,800 manufacturing establishments. Furthermore, a supportive business environment, characterized by initiatives like the lowering of the state’s commercial property tax assessment ratio (State-level), aims to ensure Arizona’s continued economic competitiveness.
Private Investment Driving Revitalization
The involvement of developers like Lincoln Property Co., recognized as a leading industrial real estate developer in Arizona, underscores the vital role of private investment in urban revitalization. Private capital efficiently identifies market gaps and deploys resources to meet emerging needs, often with greater agility than public initiatives alone. This specific project aligns with Lincoln Property Co.’s proven track record in the Phoenix market, which includes substantial industrial developments like Luke Field in Glendale and the Park303 logistics park, both of which feature Class A industrial spaces designed for modern manufacturing and distribution. These developments demonstrate the capacity of private enterprises to deliver significant infrastructure that supports a growing economy.
While office-to-industrial conversions can present challenges, including zoning issues, infrastructure upgrades, and potential community concerns regarding increased truck traffic, they often represent a fiscally sound decision. Converting properties can be less costly than new construction in some cases, and, on average, conversions cost 16% less and take 17% less time compared to new builds. The strategic deployment of private funds not only transforms individual properties but also signals confidence in the long-term economic prospects of the region, attracting further investment and fostering a cycle of growth.
A Blueprint for Future Economic Growth
This Tempe project serves as a practical example for other communities facing similar challenges with underutilized commercial properties. The trend of office-to-industrial conversions is growing Nationwide, driven by a widening gap between office and industrial vacancy rates. On a national level, office vacancy rates were 16.6% in Q3 2021, while industrial vacancy rates were 4.6%. By proactively repurposing assets, communities can capitalize on shifting market dynamics and enhance their economic resilience.
Phoenix’s commercial real estate market is supported by a resilient job sector, projected to grow 15% in the next decade, and a population growth of 20% over the previous ten years. This creates an attractive environment for investors and tenants. The city’s focus on high-tech manufacturing, healthcare, and renewable energy sectors positions it as a forward-thinking metropolitan area with abundant opportunities for investors and Arizona AZ entrepreneurs. The transformation of this vacant Tempe office building into an industrial site is not merely a local development; it is a blueprint for innovative economic development that harnesses the power of private initiative and market responsiveness to build a stronger, more dynamic future for the entire region.
Conclusion
The conversion of a vacant Tempe office building into a robust industrial site by Lincoln Property Co. exemplifies the adaptive spirit driving Phoenix AZ business and economic growth. This project, fueled by significant private investment, addresses the evolving needs of the market by transforming underutilized assets into productive spaces for logistics and manufacturing. It highlights the ingenuity of Arizona AZ entrepreneurs in navigating commercial real estate shifts, contributing to job creation, and bolstering the region’s economic resilience. As Phoenix continues its trajectory as a leading industrial hub, initiatives like this will be crucial for sustaining prosperity. We encourage our readers to stay engaged in Phoenix’s ongoing economic growth and support the local businesses that are building a vibrant future.
FAQ
What is the project in Tempe?
A prominent developer is planning to turn a single-story, 218,268-square-foot office property built in 1977 into a new industrial project in Tempe.
Who is the developer behind this project?
The prominent Valley developer Lincoln Property Co. is planning to undertake this project.
Where is the vacant office building located?
The project will replace a vacant two-story office building located on the southeast corner of Elliot Road and Hardy Drive in Tempe.
Why are vacant office buildings being converted to industrial sites?
Nationwide, old suburban office parks are getting reboots, and developers are considering new uses for office and industrial parks as businesses leave. There is a widening gap between office and industrial vacancy rates on a national level; in Q3 2021, office vacancy rates were 16.6%, while industrial vacancy rates were 4.6%.
What are the benefits of converting office buildings to industrial use?
Converting properties can be less costly than new construction in some cases, and, on average, conversions cost 16% less and take 17% less time compared to new builds. Such projects contribute to job creation and strengthen local supply chains.
What is the state of the industrial market in Phoenix?
Phoenix’s industrial demand remains one of the strongest in the country. Phoenix was named the number one industrial market in the U.S. in Q1 2025, based on leasing volume, tenant activity, and market absorption. The city ranks second nationally for industrial development growth in 2022.
Key Features of the Tempe Industrial Redevelopment
| Feature | Description | Scope |
|---|---|---|
| Developer | Lincoln Property Co. | Local |
| Location | Southeast corner of Elliot Road and Hardy Drive, Tempe | Local |
| Original Structure | Single-story, 218,268-square-foot office property built in 1977 | Local |
| New Use | Industrial site | Local |
| Overall Trend (Office-to-Industrial Conversion) | Old suburban office parks Nationwide are being repurposed | Nationwide |
| Phoenix Industrial Market Rank (Q1 2025) | No. 1 in the U.S. based on leasing volume, tenant activity, and market absorption | National |
| Phoenix Industrial Development Growth (2022) | Second nationally for industrial development growth | National |
| Conversion Cost & Time Savings | Average 16% less cost and 17% less time compared to new builds | 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.
