Contractor tied to TSMC adds to industrial boom in Phoenix’s chipmaking hub

One company helping to build Taiwan Semiconductor Manufacturing Co.’s fast-growing Phoenix plant has taken up some real estate of its own as the region benefits from the chipmaking sector.

Taiwan-based Marketech International Corp. signed a more than 150,000-square-foot, full-building lease at the Deer Valley Business Campus, roughly 10 miles from TSMC’s Arizona operations.

Marketech is a general contractor that works closely with TSMC for building out clean rooms and tenant improvements. The company has been employed in Deer Valley across multiple locations for about five years in supporting the buildout of TSMC’s campus, said Kidder Matthews’ Mike Ciosek, who represented Marketech in its lease.

The lease comes just weeks after TSMC announced plans for another $100 billion investment into its Phoenix plant, bringing its total pledge to $265 billion for its Arizona operations.

With TSMC’s ongoing expansion, competition for space in Deer Valley has only heated up among suppliers. Ciosek said options are limited for a building between 10,000 and 20,000 square feet. Spaces with more than 100,000 square feet have recently been completed or are actively being built, but that can present new challenges for users.

“My partner Eric Bell and I have worked in Deer Valley for close to 23 years, almost exclusively, and we’ve never seen Deer Valley quite this busy,” Ciosek said.

Ciosek said Marketech’s new warehouse accommodates additional expansion phases for TSMC, serving as a storage area for materials that will be used for the buildout.

It’s not uncommon to see piles of materials in “laydown yards” near an active construction site, but the Arizona sun, especially during the summer, can wear them down to the point where they need to be replaced.

Ciosek said that TSMC contractors have learned that there’s an advantage to storing materials indoors, hence the need for warehouse space.

He added that Marketech’s materials, namely stainless steel, will be built in Taiwan, shipped to the U.S., and transported and stored in Phoenix until they’re needed for construction. Marketech is already working with the city of Phoenix to obtain a temporary occupancy permit, as materials are already on their way from Taiwan.

A building that offered a quick trip back and forth from TSMC was a priority when it was scouting locations for the warehouse.

“We had good options that were outside of Deer Valley, but ultimately the CEO of the company chose this location based on the proximity to the overall TSMC location,” Ciosek said.

Demand for industrial spaces near TSMC is expected to push rent and investment prices higher, Ciosek said.

“With new development comes new pricing. It’s going to, I think, kind of change the landscape in terms of what people have been used to getting from a price-per-square-foot perspective,” Ciosek said. “It will test the bounds of what people are willing to pay to be within that proximity.”

The Deer Valley-Pinnacle Peak industrial area has asking rents of $17.33 per square foot, which is more than $4 above the asking rates across Phoenix. Additionally, the area boasts an 8.2% vacancy rate, which comes in below the 10.7% rate across Phoenix’s industrial market, according to CoStar.

Mike Ciosek and Eric Bell of Kidder Matthews represented Marketech, while CBRE’s Mark Krison and Luke Krison represented the landlord, Sunbelt Investment Holdings.