US Bank leaves downtown Phoenix tower after nearly 20 years – The Business Journals

Minneapolis-based U.S. Bank is parting ways with the 101 North office tower nearly 20 years after it first moved its regional headquarters into the 31-story building in downtown Phoenix and opened its first branches in the Valley.
The office tower, known as the second tallest building in Arizona, is located at the northeast corner of 1st Avenue and Adams Street and was named U.S. Bank Center in 2004. The owner of the building, Portland-based ScanlanKemperBard Cos., said the U.S. Bank signs at the top of the building will be removed in the next two weeks.
U.S. Bank follows Wells Fargo and Chase in moving their major office footprints out of the downtown Phoenix business core following the Covid-19 pandemic to consolidate in offices in other parts of the Valley. It will create additional space for other types of companies looking to move downtown.
The bank’s lease ends in October for approximately 30,000 square feet, including space on the first floor, which it no longer needs since it plans to consolidate its employees into its existing 9,000-square-foot office space at 16220 N. Scottsdale Road.
“As we approach the 20th anniversary of our first branches in the Phoenix area, our commitment to our customers and the community are as strong as ever. Over that same period, our non-branch office space has evolved as well,” U.S. Bank said in a statement provided to the Business Journal. “As we evaluated our present and future office space needs, we made the decision to expand our space near Kierland in Scottsdale while also electing to not renew our lease in downtown Phoenix.”
U.S. Bank said this will allow them to consolidate its team currently based in downtown Phoenix, which has about 36 corporate and commercial employees, as well as its employees based in in its existing locations across Phoenix and Scottsdale.
“We are proud to serve our clients and customers across nearly 50 branch locations in Maricopa County and hope to have a few additional locations to share in the near future,” the company added.
U.S. Bank said it’s looking to expand its Scottsdale office by 6,000 square feet. The Scottsdale office is located close to the Scottsdale Airport near Bell Road and Loop 101, as well as a large number of retail and commercial centers.
In 2020, the bank closed several of its branches across the Valley, including its downtown Phoenix branch on the first floor of 101 North building. The company closed its downtown branch location permanently after temporarily shutting it down due to the pandemic.
According to JLL, the leasing brokerage for the building, the office tower currently has about 107,000 square feet of space available, or about 30% of the nearly 360,000 square feet of leasable space. JLL’s data shows that downtown Phoenix had a 26% direct vacancy rate in Q2, which is higher than the region’s 18% direct vacancy rate.
With the three major banks leaving downtown, John Bonnell, a managing director for JLL in Phoenix, said this will set the building up to attract both in-state and out-of-state tenants.
“That is significant contiguous space, new renovations that have delivered extensive on-site amenities, the added amenities of downtown and easy access to public transportation,” Bonnell said. “These are all enticements that employers are counting on to get employees back to the office. At 101 North, there is the added opportunity for a company to put their name at the top of one of the tallest buildings in Arizona.”
SKB said it has not found a new anchor tenant for the building yet, but said the vacancy from U.S. Bank will open doors for another company, as well as a new ground-floor retail user in 3,500 square feet, where the bank’s branch was previously located.
“We’re sorry to see them go,” said Todd Gooding, principal and president of SKB. “The upside of it is, it’ll give us an opportunity to put something that will allow us to really engage the community on the ground floor. We’ve done a good job of trying to find a good eclectic mix of retailers, and that corner will give us the opportunity to enhance the programming that we’ve already done.”
The 101 North building currently houses tenants including the Phoenix Business Journal, WeWork, Valley Metro and Jacobs Engineering Group. Through a joint venture, Miami-based Black Salmon and SKB purchased the building in 2019 for $92 million. Since then, about $9 million in renovations, including amenities such as a fitness center and renovating the main lobby, were completed by general contractor Stevens-Leinweber and architect Nelsen Partners.
The U.S. Bank Center, which has returned to its former name 101 North, was built in the 1970s. Before U.S. Bank, the office building’s anchor tenant was Bank of America until 2001, when the company moved its local headquarters out of the building. SKB said it will continue leasing out its building for office and retail uses.
Last year, Chase moved out of the Chase Tower for offices in Tempe, while Wells Fargo transitioned out of its downtown Phoenix location after selling its building to the city of Phoenix.
While the downtown Phoenix area has evolved significantly since U.S. Bank first moved into the 101 North building, more retail, education, bioscience and residential projects have been developed in the area, bringing more residents to the city’s center.
According to Downtown Phoenix Inc., nearly 12,000 multifamily units have been built since 2000, while about 34% of those were built since 2000. Downtown also has about 60,000 square feet of retail space under construction. Since March of 2020, the downtown nonprofit said it has also seen 18 new bar or restaurant concepts in its service area.
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