{"id":1004551299,"date":"2021-09-23T16:28:02","date_gmt":"2021-09-24T00:28:02","guid":{"rendered":"https:\/\/www.commercialsearch.com\/news\/?p=1004551299"},"modified":"2022-12-09T02:10:09","modified_gmt":"2022-12-09T10:10:09","slug":"phoenix-is-thriving-heres-why","status":"publish","type":"post","link":"https:\/\/www.commercialsearch.com\/news\/phoenix-is-thriving-heres-why\/","title":{"rendered":"Phoenix Is Thriving. Here\u2019s Why."},"content":{"rendered":"
\"\"<\/a>

Phoenix. Image by Kevin Ellis via Pixabay<\/p><\/div>\n

Greater Phoenix has become the epitome of economic development in recent years. Thanks to the region\u2019s tax-friendly environment, relatively low cost of living, favorable business policies and a growing talent pool, the Valley of the Sun is becoming a leading global region.<\/p>\n

Phoenix grew faster than any other major city over the last decade, expanding its population by 11.2 percent with the addition of more than 160,000 residents from 2010 to 2020, according to the U.S. Census Bureau. Phoenix is now the country\u2019s fifth largest city, just after New York, Los Angeles, Chicago and Houston.<\/p>\n

Buckeye and Goodyear, in the West Valley, were also among the nation\u2019s 10 fastest-growing cities during the past decade. Buckeye registered an 80 percent growth with its population reaching more than 91,000, 2020 census data shows.<\/p>\n

As a result of the region’s tremendous expansion, \u201cJob creators have taken notice, and Arizona and its most populous metro region consistently show up on top 10 lists for economic growth, projected job gains, and best places to do business,\u201d Danny Seiden, president & CEO of the Arizona Chamber of Commerce & Industry told Commercial Property Executive.<\/em><\/p>\n

\n

READ ALSO: <\/strong>What\u2019s Fueling the Rapid Expansion of Phoenix CRE<\/a><\/p>\n

\n

Robust growth drives huge commitments<\/h2>\n
\"\"<\/a>

Image by F. Muhammad from Pixabay<\/p><\/div>\n

With continued growth also comes great diversity. Phoenix\u2019s economy is driven by six key industries, including technology, biomed, health care, manufacturing, business operations and finance, aerospace and warehousing\/fulfillment and distribution, Mark Stapp, professor of real estate at Arizona State University, told CPE.<\/em><\/p>\n

Owing to this diverse economy, Phoenix employment showed resilience during the pandemic-induced turbulence. The city gained more than 154,000 jobs in the 12 months ending in July, while the unemployment rate stood at 5.8 percent, down 80 basis points over June, according to preliminary data by the U.S. Bureau of Labor and Statistics.<\/p>\n

\u201cManufacturing jobs now outnumber construction jobs. We\u2019ve seen advanced manufacturing really take off, with multi-billion investments planned by chipmakers and next-generation automakers, but we\u2019re also seeing investments from sectors like financial services and insurance, warehousing and logistics, food and beverage manufacturing, aerospace and defense and health care,\u201d Seiden said.<\/p>\n

Indeed, over the past year, Phoenix saw major players making significant commitments, including Taiwan Semiconductor Manufacturing Co.\u2019s $12 billion and Intel\u2019s $20 billion investment into chipmaking factories<\/a>, which are expected to create approximately 5,000 direct, high-wage jobs, as well as thousands of indirect positions for suppliers and other firms within the semiconductor industry in the next few years.<\/p>\n

\u201cGreater Phoenix is beginning to shed its reputation as a second-tier market, even among large, institutional investors. This spring, Phoenix ranked sixth in the nation for places international investors intend to increase their real estate holdings according to a survey by the Association of Foreign Investors in Real Estate,\u201d Suzanne Kinney, president & CEO of the Arizona Chapter of NAIOP, told CPE. <\/em><\/p>\n

Other high-profile companies like Amazon and Microsoft also continued to strengthen their presence in the city. Meanwhile, capital is flowing into Phoenix from electronic and autonomous vehicle manufacturers including Lucid Motors, Nikola and ElectraMeccanica, Kinney pointed out.<\/p>\n

Real estate responds<\/h2>\n
\"\"<\/a>

Image by Pashminu Mansukhani via Pixabay<\/p><\/div>\n

Thanks to the positive demographic trends and continuous business expansions, demand has increased for commercial real estate. Investors and developers continue to find opportunities from residential to Class A office and industrial space across the metro. \u201cThis strong, diverse and growing economy coupled with a natural environment that accommodates growth, social changes and the pandemic made the region attractive to investors,\u201d said Stapp.<\/p>\n

Although the industrial and multifamily sectors\u2014the two leading asset classes in Phoenix\u2014have experienced some setbacks due to the pandemic, both sectors have recovered quickly, posting historic highs in construction, absorption and investment sales activity, Cathy Thuringer, managing director at Trammell Crow Co.\u2019s Phoenix office, told CPE. <\/em><\/p>\n

Earlier this year, CBRE named Phoenix as the top growth market in the U.S.<\/a> when it comes to big-box leasing activity, with a 2020 inventory absorption of 9.1 percent. Phoenix also had the most robust industrial pipeline as of July, with 23.9 million square feet under construction, representing 9 percent of the city\u2019s existing inventory, according to CommercialEdge data.<\/p>\n

\u201cA combination of existing occupiers expanding along with new entrants into the market has created significant demand for new well-located and well-designed industrial product in Phoenix,\u201d Thuringer said.<\/p>\n

According to CommercialEdge, Trammell Crow Co. owns nearly 1.4 million square feet of industrial space in Phoenix and is set to further expand this portfolio. One year after the completion of the 356,000-square-foot Park Aldea industrial development in the West Valley submarket along West Loop 101, the company revealed plans to develop<\/a> a second phase of the project, encompassing 570,600 square feet across four buildings.<\/p>\n

\u201cTrammell Crow Co. has seen strong tenant velocity in the West Loop 101 submarket leading to 100 percent occupancy in Phase 1 only one year after completing the shell buildings,\u201d Thuringer explained. \u201cWith this limited supply and increasing demand, we think it is the perfect time to bring Phase 2 out of the ground and provide tenants in the market with best-in-class industrial space,\u201d she added.<\/p>\n

Preparing for tomorrow<\/h2>\n
\"\"<\/a>

Image by Pexels from Pixabay<\/p><\/div>\n

While Phoenix has laid down great fundamentals for economic development, the city needs to continue investing in critical infrastructures\u2014including transportation, water, and cultural and social support systems\u2014to sustain future growth.<\/p>\n

According to Kinney, to maintain the region\u2019s success, it is important to focus on large transportation projects that are the backbone of Arizona\u2019s economy. Providing easy access to Southern California and other regional markets, Interstate 10 has been driving development of distribution centers and other industrial facilities in the West Valley. Likewise, Interstate 17, Arizona\u2019s North-South corridor, is also crucial for distribution and keeping people moving.<\/p>\n

While Arizona is often described as free of natural disasters, the state\u2019s water supply is limited. As droughts worsen and the Colorado River continues to decline, it is important for Phoenix to remain resource conscious. \u201cBased on the 2019 Drought Contingency Plan (DCP), we are currently in Tier 1 reductions that are impacting the state\u2019s use of Colorado River water,\u201d Kinney said.<\/p>\n

\n

READ ALSO: <\/strong>Top Projects That Will Reshape Phoenix<\/a><\/p>\n

\n

The anticipated reductions will primarily impact agriculture, while water for municipal use and key industries, like manufacturing won\u2019t suffer cuts, unless a more severe shortage is declared. Earlier this year, Intel and the City of Chandler announced an agreement to construct a new Reclaimed Water Interconnect Facility, which will treat 10 million gallons daily. The water will be used to recharge the city\u2019s underground aquifer and for Intel\u2019s cooling towers. The $26 million construction will help the City of Chandler to manage future drought, and it will also feed into Intel\u2019s recently announced expansion plans.<\/p>\n

Lastly, although Phoenix is deemed as a more affordable place to live compared to gateway cities, housing prices and rental rates are rising, while the affordable housing supply is shrinking. According to the National Low Income Housing Coalition\u2019s Gap report, Phoenix has the fourth worst affordable housing shortage in the country when it comes to households with extremely low incomes, with just 21 available affordable units for every 100 households. Therefore, to ensure fair and diverse growth in the long term, Phoenix needs to invest in closing the housing gap through increasing its affordable housing supply.<\/p>\n

\u201cIt is important that we drive quality of life for all segments of the community and make the region a sought-after place to live\u2014we cannot expect to continue robust growth by being the low-cost provider, the cheapest place to do business. We must develop a diverse, inclusive community and not treat our growth like managing a commodity,\u201d Stapp said.<\/p>\n","protected":false},"excerpt":{"rendered":"

A deep dive into Phoenix\u2019s burgeoning economy and growing real estate market. <\/p>\n","protected":false},"author":871,"featured_media":1004551305,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21748,21742,1601,15],"tags":[36066,32878,32893],"class_list":["post-1004551299","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-industrial","category-latest","category-phoenix","category-west","tag-arizona-state-university","tag-naiop","tag-trammell-crow-company"],"acf":[],"yoast_head":"\nPhoenix Is Thriving. Here\u2019s Why. - Commercial Property Executive<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.commercialsearch.com\/news\/phoenix-is-thriving-heres-why\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Phoenix Is Thriving. Here\u2019s Why.\" \/>\n<meta property=\"og:description\" content=\"A deep dive into Phoenix\u2019s burgeoning economy and growing real estate market.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.commercialsearch.com\/news\/phoenix-is-thriving-heres-why\/\" \/>\n<meta property=\"og:site_name\" content=\"Commercial Property Executive\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/CPExecutive\" \/>\n<meta property=\"article:published_time\" content=\"2021-09-24T00:28:02+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2022-12-09T10:10:09+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2021\/09\/Image-by-Pexels-from-Pixabay.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"800\" \/>\n\t<meta property=\"og:image:height\" content=\"620\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Evelyn Jozsa\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@cpexecutive\" \/>\n<meta name=\"twitter:site\" content=\"@cpexecutive\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.commercialsearch.com\/news\/phoenix-is-thriving-heres-why\/\",\"url\":\"https:\/\/www.commercialsearch.com\/news\/phoenix-is-thriving-heres-why\/\",\"name\":\"Phoenix Is Thriving. Here\u2019s Why. - Commercial Property Executive\",\"isPartOf\":{\"@id\":\"https:\/\/www.commercialsearch.com\/news\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.commercialsearch.com\/news\/phoenix-is-thriving-heres-why\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/www.commercialsearch.com\/news\/phoenix-is-thriving-heres-why\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2021\/09\/Image-by-Pexels-from-Pixabay.jpg\",\"datePublished\":\"2021-09-24T00:28:02+00:00\",\"dateModified\":\"2022-12-09T10:10:09+00:00\",\"author\":{\"@id\":\"https:\/\/www.commercialsearch.com\/news\/#\/schema\/person\/7a1fad8f1e02fa4d8f81f7e9ad21736a\"},\"breadcrumb\":{\"@id\":\"https:\/\/www.commercialsearch.com\/news\/phoenix-is-thriving-heres-why\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.commercialsearch.com\/news\/phoenix-is-thriving-heres-why\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.commercialsearch.com\/news\/phoenix-is-thriving-heres-why\/#primaryimage\",\"url\":\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2021\/09\/Image-by-Pexels-from-Pixabay.jpg\",\"contentUrl\":\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2021\/09\/Image-by-Pexels-from-Pixabay.jpg\",\"width\":800,\"height\":620,\"caption\":\"Image by Pexels from Pixabay\"},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/www.commercialsearch.com\/news\/phoenix-is-thriving-heres-why\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/www.commercialsearch.com\/news\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Phoenix Is Thriving. Here\u2019s Why.\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/www.commercialsearch.com\/news\/#website\",\"url\":\"https:\/\/www.commercialsearch.com\/news\/\",\"name\":\"Commercial Property Executive\",\"description\":\"\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/www.commercialsearch.com\/news\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en-US\"},{\"@type\":\"Person\",\"@id\":\"https:\/\/www.commercialsearch.com\/news\/#\/schema\/person\/7a1fad8f1e02fa4d8f81f7e9ad21736a\",\"name\":\"Evelyn Jozsa\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.commercialsearch.com\/news\/#\/schema\/person\/image\/\",\"url\":\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2021\/04\/Evelyn-Jozsa-1.jpg?w=96\",\"contentUrl\":\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2021\/04\/Evelyn-Jozsa-1.jpg?w=96\",\"caption\":\"Evelyn Jozsa\"},\"description\":\"Evelyn is a creative writer covering commercial real estate trends and insights in the U.S. Evelyn was previously a senior associate editor at Multi-Housing News and Commercial Property Executive. She has an academic background in Journalism and Irish Studies. Evelyn has been covering the CRE industry since 2017. Reach her via email.\",\"url\":\"https:\/\/www.commercialsearch.com\/news\/author\/evelynjozsa\/\"}]}<\/script>\n<!-- \/ Yoast SEO Premium plugin. -->","yoast_head_json":{"title":"Phoenix Is Thriving. Here\u2019s Why. - Commercial Property Executive","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/www.commercialsearch.com\/news\/phoenix-is-thriving-heres-why\/","og_locale":"en_US","og_type":"article","og_title":"Phoenix Is Thriving. Here\u2019s Why.","og_description":"A deep dive into Phoenix\u2019s burgeoning economy and growing real estate market.","og_url":"https:\/\/www.commercialsearch.com\/news\/phoenix-is-thriving-heres-why\/","og_site_name":"Commercial Property Executive","article_publisher":"https:\/\/www.facebook.com\/CPExecutive","article_published_time":"2021-09-24T00:28:02+00:00","article_modified_time":"2022-12-09T10:10:09+00:00","og_image":[{"width":800,"height":620,"url":"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2021\/09\/Image-by-Pexels-from-Pixabay.jpg","type":"image\/jpeg"}],"author":"Evelyn Jozsa","twitter_card":"summary_large_image","twitter_creator":"@cpexecutive","twitter_site":"@cpexecutive","schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"WebPage","@id":"https:\/\/www.commercialsearch.com\/news\/phoenix-is-thriving-heres-why\/","url":"https:\/\/www.commercialsearch.com\/news\/phoenix-is-thriving-heres-why\/","name":"Phoenix Is Thriving. Here\u2019s Why. - Commercial Property Executive","isPartOf":{"@id":"https:\/\/www.commercialsearch.com\/news\/#website"},"primaryImageOfPage":{"@id":"https:\/\/www.commercialsearch.com\/news\/phoenix-is-thriving-heres-why\/#primaryimage"},"image":{"@id":"https:\/\/www.commercialsearch.com\/news\/phoenix-is-thriving-heres-why\/#primaryimage"},"thumbnailUrl":"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2021\/09\/Image-by-Pexels-from-Pixabay.jpg","datePublished":"2021-09-24T00:28:02+00:00","dateModified":"2022-12-09T10:10:09+00:00","author":{"@id":"https:\/\/www.commercialsearch.com\/news\/#\/schema\/person\/7a1fad8f1e02fa4d8f81f7e9ad21736a"},"breadcrumb":{"@id":"https:\/\/www.commercialsearch.com\/news\/phoenix-is-thriving-heres-why\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/www.commercialsearch.com\/news\/phoenix-is-thriving-heres-why\/"]}]},{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.commercialsearch.com\/news\/phoenix-is-thriving-heres-why\/#primaryimage","url":"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2021\/09\/Image-by-Pexels-from-Pixabay.jpg","contentUrl":"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2021\/09\/Image-by-Pexels-from-Pixabay.jpg","width":800,"height":620,"caption":"Image by Pexels from Pixabay"},{"@type":"BreadcrumbList","@id":"https:\/\/www.commercialsearch.com\/news\/phoenix-is-thriving-heres-why\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/www.commercialsearch.com\/news\/"},{"@type":"ListItem","position":2,"name":"Phoenix Is Thriving. Here\u2019s Why."}]},{"@type":"WebSite","@id":"https:\/\/www.commercialsearch.com\/news\/#website","url":"https:\/\/www.commercialsearch.com\/news\/","name":"Commercial Property Executive","description":"","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/www.commercialsearch.com\/news\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-US"},{"@type":"Person","@id":"https:\/\/www.commercialsearch.com\/news\/#\/schema\/person\/7a1fad8f1e02fa4d8f81f7e9ad21736a","name":"Evelyn Jozsa","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.commercialsearch.com\/news\/#\/schema\/person\/image\/","url":"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2021\/04\/Evelyn-Jozsa-1.jpg?w=96","contentUrl":"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2021\/04\/Evelyn-Jozsa-1.jpg?w=96","caption":"Evelyn Jozsa"},"description":"Evelyn is a creative writer covering commercial real estate trends and insights in the U.S. Evelyn was previously a senior associate editor at Multi-Housing News and Commercial Property Executive. She has an academic background in Journalism and Irish Studies. Evelyn has been covering the CRE industry since 2017. Reach her via email.","url":"https:\/\/www.commercialsearch.com\/news\/author\/evelynjozsa\/"}]}},"jetpack_featured_media_url":"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2021\/09\/Image-by-Pexels-from-Pixabay.jpg","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/posts\/1004551299","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/users\/871"}],"replies":[{"embeddable":true,"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/comments?post=1004551299"}],"version-history":[{"count":10,"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/posts\/1004551299\/revisions"}],"predecessor-version":[{"id":1004552060,"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/posts\/1004551299\/revisions\/1004552060"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/media\/1004551305"}],"wp:attachment":[{"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/media?parent=1004551299"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/categories?post=1004551299"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/tags?post=1004551299"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}