“Arizona continues to attract new residents and companies due to lower taxes and a friendlier business climate,” per Forbes in April 2018. True enough, and there are numerous other factors supporting Arizona’s transformation as a thriving location for site selection across the globe.
There are a variety of factors. An educated workforce with a broad spectrum of universities and tech schools has diminished the “skills gap.” Other factors that include advanced life science research, innovative work in water preservation, emerging technologies, growing aerospace and defense, more advanced manufacturing and continued agriculture production have helped attract attention of ACE (Americas Competitiveness Exchange).
Due to low vacancy rates in the commercial building and multifamily sectors, construction and cranes dominate the skyline in many parts of the Valley. According to the Association for Corporate Growth, Arizona gained more construction jobs than any other state between 2017 and 2018, adding an additional 4,500 jobs. The forecast for Arizona’s economy in 2019 from every angle includes more jobs, growth and more inflow. The U.S. Census Bureau measured 262,000 people moving to Arizona in the past year, including nearly 60,000 from California. Looking ahead, Arizona is again expected rank among the top states for economic growth, job gains and population increases.
In 3rd quarter 2018, the Phoenix office market alone had startling statistics that included:
- Under Construction: 2,891,371 square feet
- Average Rent: $25.04 per square foot
- Vacancy Rate: 13.6 percent
- Net Absorption: 1,097,616 square feet
Because Arizona has become the place for talent to be bred, community to be built and business to thrive, investors looking to purchase commercial buildings, whether office, industrial, medical or retail have viewed Arizona as their “ticket to paradise.” That ticket is being punched more and more not just with other Americans, but with foreign-based companies that are landing in unprecedented numbers. As our economy expands, global business and investments should create unlimited opportunities in years to come.
Renee Ervanian is senior vice president at Heiple Travers Realty.