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Like a phoenix rising from the ashes, Phoenix is seeing a rebirth. Hit hard by economic downturn, Phoenix has slowly, or quickly depending on how you view it, found itself as one of the most thriving Metros in the county. Factors such as population growth, job creation, a rebounding housing market, and favorable commercial real estate activity make Phoenix Metro a more than attractive site for business and tenant expansion in the coming months and years.
- Phoenix ranks as the 8th fastest growing metro area between 2010-2016, according to the U.S. Census Bureau
- Maricopa County ranks as THE fastest growing county between 2015-2016
- Maricopa County added 81,360 people between 2015-2016. Harris County (Houston area) was second with 56,587
- On average, 1,436 people moved to Phoenix per week between 2010-2016
- Projected growth by 2025: Phoenix Metro will grow by 23.2% to 5.5 million
- Phoenix projected as top housing market in 2017 by Realtor.com
- Price gains of 5.9 percent predicted for 2017
- Sales growth of 7.2 percent predicted for 2017
- 2016 produced best year of sales volume since 2006
This is a market recovery that many analysts predicted might not recover for decades; a demonstration of not only the strong economic foundation of Phoenix, but also the strength of the national economic recovery.
- Phoenix is expected to see 2.8 percent job growth in 2017, double the national average of 1.4 percent
- Projected 9th best increase among largest US markets
- Phoenix has better job growth projections than NY, DC, LA, and Silicon Valley
- Arizona is expected to jump by nearly 140,000 jobs over the next two years with 83 percent of the growth forecasted to center in the Valley
- Greater Phoenix lost 300,500 jobs between peak employment in December 2007 and the low point in July 2010
- Since July 2010 the metropolitan region has regained 299,600 jobs, or 99.7% of lost jobs
- Q4 2016 saw roughly 600,000 SF of positive net absorption
- Nearly 5 million SF of gross leasing activity in 2016 (roughly 1 million SF more than 2015)
- Market wide vacancy dropped 4 basis points quarter-over-quarter, to 8.9 percent to end 2016
- Commercial real estate development hit a six-year high in 2016, with 1.3 million SF delivered
- Ranked 9th best market for retail investment, by NREI
And while the Phoenix retail vacancy may remain higher than many expected, or had hoped at this point in the recovery, there are still positive signs within the market. Brands like Macy’s, who has decided to close nearly 70 stores across the country this year, has said that none of those stores will be in Arizona. Tenants like Bush’s Chicken, a well-known quick-serve restaurant from Texas, picked the Phoenix Metro market as its first outside of Texas.
The increases in population and strength of the residential real estate market may be a significant indicator of where we might see the commercial real estate sector headed. Job growth should also lead to higher consumer spending, opening the doors of opportunity for a stronger commercial real estate sector as brands look to expand either within, or into Phoenix’s strong market.