Greater Phoenix is the epitome of economic development in recent years. Thanks to the region’s tax-friendly environment, relatively low living costs, favorable business policies and a growing pool of talent, the Valley of the Sun is becoming a world-leading region.
According to the US Census Bureau, Phoenix has grown faster than any other major city in the last decade, with a population increase of 11.2% and more than 160,000 inhabitants between 2010 and 2020. Phoenix is currently the fifth largest city in the country after New York, Los Angeles, Chicago and Houston.
Backeye and Goodyear in the West Valley were also one of the ten fastest growing cities in the United States in the last decade. Buckeye recorded 80% growth and a population of over 91,000, as shown by the 2020 census data.
As a result of the region’s tremendous expansion, “Job creators are in the spotlight, and Arizona and its most populous metropolitan areas are the perfect places for economic growth, projected job growth and business. Is always on the top 10 list of the Arizona Chamber of Commerce, said Danny Seiden, President and CEO of the Arizona Chamber of Commerce. Commercial real estate executive.
Strong growth drives great commitment
With continued growth, great diversity is born. Phoenix’s economy is driven by six major industries, including technology, biomedical, healthcare, manufacturing, business operations and finance, aerospace and warehousing / performance and distribution, said a real estate professor at Arizona State University. Mark Stap said. CPE.
Thanks to this diverse economy, Phoenix employment has shown resilience during the turmoil caused by the pandemic. Preliminary data from the US Bureau of Labor Statistics found more than 154,000 jobs in the 12 months to July, with an unemployment rate of 5.8%, down 80 basis points from June.
“Currently, manufacturing jobs outnumber construction jobs. With billions of investments planned by chip makers and next-generation automakers, advanced manufacturing is on track in earnest. “Financial services and insurance, warehousing and logistics, food and beverage manufacturing, aerospace, defense and healthcare,” said Seiden.
In fact, over the past year, Phoenix has seen key players make important commitments, including Taiwan Semiconductor Manufacturing Co.’s $ 12 billion and Intel’s $ 20 billion. Investing in a chip manufacturing plantIs expected to create approximately 5,000 direct, high-paying jobs and thousands of indirect jobs for suppliers and other companies within the semiconductor industry over the next few years.
“Greater Phoenix is beginning to lose its reputation as a second-tier market, even among large institutional investors. Susanne Kinney, president and CEO of NAIOP’s Arizona branch, said Phoenix said this spring. According to a survey by the Foreign Investors Association, it was ranked 6th in the country where international investors plan to increase their real estate holdings. CPE.
Other prominent companies like Amazon and Microsoft have continued to strengthen their presence in the city. Meanwhile, capital is flowing into Phoenix from electronic and self-driving car manufacturers such as Lucid Motors, Nikola and Electra Meccanica, Kinney said.
Real estate reacts
Demand for commercial real estate is increasing due to positive demographic trends and continued business expansion. Investors and developers continue to find opportunities across the metro, from residential to class A offices and industrial spaces. “This strong, diverse and growing economy, combined with the natural environment for growth, social change and pandemics, has made the region attractive to investors,” said Stapp. ..
Phoenix’s two major asset classes, the Industrial and Multifamily sectors, have experienced some setbacks due to the pandemic, but both sectors are recovering rapidly, reaching record highs in construction, absorption and investment sales activities. Recorded, Cathy Thuringer, Managing Director of Trammell Crow, Phoenix Office, Inc. CPE.
Earlier this year, CBRE Phoenix as the top growing market in the United States Inventory absorption rate in 2020 is 9.1%, for large-scale leasing activities. Also, according to CommercialEdge data, Phoenix has the most robust industrial pipeline as of July, with 23.9 million square feet under construction representing 9% of the city’s existing inventory.
“The growing combination of existing occupants with new entrants to the market has created a great demand for new, well-placed and well-designed industrial products in Phoenix,” Thuringer said.
According to CommercialEdge, Trammell Crow Co. owns approximately 1.4 million square feet of industrial space in Phoenix and plans to further expand this portfolio. A year after the 356,000-square-foot Park Aldea industrial development was completed at the West Valley Submarket along West Loop 101 The company revealed plans to develop The second phase of the project will include 570,600 square feet across four buildings.
“Trammell CrowCo. Has fast tenants in the West Loop 101 submarket, with Phase 1 occupancy of 100% in just one year after the Shell building was completed,” explained Thuringer. “This limited supply and demand growth is a great opportunity to get Phase 2 off the ground and provide market tenants with best-in-class industrial space,” she added.
Preparing for tomorrow
Phoenix has laid a good foundation for economic development, but the city continues to invest in critical infrastructure such as transportation, water, cultural and social support systems to sustain future growth. need to do it.
According to Kinney, it is important to focus on the large transport projects that are the backbone of the Arizona economy in order to maintain the success of the region. Interstate 10 provides easy access to Southern California and other regional markets, driving the development of West Valley distribution centers and other industrial facilities. Similarly, the Interstate 17 which is the north-south corridor of Arizona is also important for maintaining the distribution and movement of people.
Arizona is often said to be free of natural disasters, but the state’s water supply is limited. As the drought worsens and the Colorado River continues to decline, it is important for Phoenix to remain resource conscious. “Based on the 2019 Drought Emergency Response Plan (DCP), we are currently working on reducing Tier 1 impacts on the Colorado River’s water use,” said Kinney.
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Expected cuts primarily affect agriculture, but major industries such as municipal water and manufacturing will not suffer cuts unless a more serious shortage is declared. Earlier this year, Intel and the city of Chandler announced that they had agreed to build a new reclaimed water interconnect facility that processes 10 million gallons daily. This water will be used to recharge the city’s underground aquifers and Intel’s cooling towers. The $ 26 million construction will help the city of Chandler manage future droughts and will be reflected in Intel’s recently announced expansion plan.
Finally, although Phoenix is considered a more livable place than gateway cities, home prices and rents are rising and affordable home supplies are shrinking. According to the National Low Income Housing Coalition’s Gap report, Phoenix is the country’s fourth most affordable housing shortage for very low-income households, with only 21 affordable units available for every 100 households. Therefore, to ensure fair and diverse growth in the long run, Phoenix needs to invest in bridging the housing gap by increasing affordable housing supplies.
“It’s important to improve the quality of life for all segments of the community and make the area a popular place to live. Continue to grow strongly by becoming the cheapest and cheapest provider to do business. We can’t expect. We have to develop a diverse and inclusive community, and we shouldn’t treat our growth like managing our products, “Stapp said.
Phoenix is prosperous.This is the reason
https://www.commercialsearch.com/news/phoenix-is-thriving-heres-why/ Phoenix is prosperous.This is the reason