Newmark Facilitates $37.5M Sale of Former State Farm Office Campus in Tempe for Industrial Redevelopment

Newmark has arranged the $37.5 million sale of the former State Farm regional headquarters campus in Tempe, Arizona, in a transaction that underscores the accelerating conversion of suburban office real estate into industrial uses across the Metro Phoenix market.

The 25-acre property, located at the southwest corner of Priest Drive and Alameda Drive, comprises approximately 462,000 square feet of office space and includes two structured parking garages. The buyer, Panattoni, has received unanimous Tempe City Council approval to redevelop the site into a two-building industrial project, to be branded "Tempe Exchange."

Deal Details and Brokerage Team

Newmark Executive Managing Barry Gabel, Chris Marchildon, and CJ Osbrink, along with Managing Director Gary Cornish, Associate Nico Burgarello, and Director Erin McClure represented the seller, JDM Partners, a Phoenix-based private real estate investment and development firm, in the transaction. The sale price implies a per-square-foot figure of approximately $81 based on the property's total office square footage.

"This sale represents a notable transaction for the Metro Phoenix market, following a trend of suburban office being redeveloped into higher and better uses," said Gabel. "Our team is tracking over seven million square feet of office across the Valley that is expected to be redeveloped or converted, including this property."

Industrial Redevelopment Plans for Tempe Exchange

Panattoni Development Company's approved redevelopment plan preserves the 858-space parking garage at the southwest corner of the site, providing covered parking to support the new industrial development — a feature the firm described as a first for the Metro Phoenix industrial market. The buildings are planned with heavy power infrastructure, positioning the project to attract advanced manufacturing users and other tenants with significant power and parking requirements.

"We had been looking for an in-fill site here in Metro Phoenix and are thrilled with this project, which we are calling 'Tempe Exchange,'" said John DiVall, Partner at Panattoni Development. "These modern buildings with structured, covered parking — a first for the market — will be well received."

The site is adjacent to the Broadway Industrial Park and is located within minutes of Arizona State University's main campus, offering freeway access and proximity to established industrial infrastructure.

Office Real Estate Conversion Trend in Metro Phoenix

The transaction reflects a broader pattern of suburban office real estate being repositioned for industrial use across the Phoenix Valley. Newmark's brokerage team noted it is tracking more than seven million square feet of office space across the region expected to be redeveloped or converted.

Gary Cornish highlighted the industrial supply dynamics driving demand for the site: "This property represents an exceptional industrial redevelopment opportunity in the heart of the Valley, offering unmatched freeway access, functional lot configuration, and scale in a land-constrained submarket. With more than 70 million square feet of industrial and flex space within a five-mile radius, approximately 90% of which was constructed prior to 2000, the site presents a compelling opportunity for Panattoni to deliver a best-in-class project in a market that is severely undersupplied with modern product."

About the Parties

Panattoni Development Company, founded in 1986, is one of the largest privately held full-service development companies in the world, operating from 70 offices across the United States, Canada, Europe, and Asia. Since its founding, the firm has developed more than 660 million square feet of space, including over 244 million square feet of build-to-suit projects.

JDM Partners is a Phoenix-based private real estate investment and development firm. Newmark Group, Inc. (Nasdaq: NMRK) reported revenues of nearly $3.3 billion for the twelve months ended December 31, 2025, and operates approximately 175 offices with over 9,300 professionals across four continents.