The Phoenix Market: Job Growth, Population Growth, Rent Growth, Overall Market Growth, and Multifamily Apartment Investing
As a booming, rapidly growing Metropolitan Statistical Area (MSA) with over 4.9 million residents, Phoenix is an area of vibrancy economically. The Valley of the Sun remains attractive due to its overall value proposition comprising of competitive cost advantage, growing talent pool, quality of life, and modern infrastructure. In addition, currently, Phoenix is also known for its inexpensive taxes; this location is suggested as best for finance, technology also advanced manufacturing companies.
Job Growth in Phoenix Metropolitan Statistical Area
Relatively new to the job market, Gummi World has introduced its dietary supplement manufacturing facility in Chandler, Arizona, with the expectation of the mayor in attendance at its opening ceremony. This multimillion-dollar facility will contribute immensely to the job market by providing a competitive salary range to its employees, in addition to its selection as one of the top 100 companies in Chandler.
According to Dr. Ayan Monpara, Chief Medical Officer at Gummi World, “the majority of the dietary supplements industry is highly unregulated and shrouded in secrecy.” Hence, this new development aims to impart firsthand extensive efforts and quality control methods placed into making their products superior to others.
With the construction of two new “Bubba’s 33” locations, job opportunities are highly expected to flourish, according to the founding owners of the Texas Roadhouse Company. Bubba’s 33 expects to be available by the summer of 2024 at its Goodyear location, while its Tempe location will be open by late 2024. The company will invest over 5 million dollars in its development and seeks to hire about 200 workers at each location.
According to Kingman, AZ report on December 2022, “one of the largest refrigerated warehouse companies in the world, Interstate Warehousing, held a groundbreaking ceremony in Kingman, Arizona announcing that its network of facilities is growing. In addition, the report stated that construction would commence in short order on the new IWI facility on a 92-acre site in Kingman.
This new infrastructural development is not only perfect for the location in Arizona, but it also expects to open doors to new opportunities for customers, to fill employment gaps. The latest development is highly anticipated, with phase one expecting to create 70 new jobs in its 273,000-square-foot facilities.
According to John Tippmann, President of Interstate Warehousing/Tippmann Group, “the strategic location provides excellent access to several major markets like Las Vegas, Phoenix, and Los Angeles.
President and CEO of the Arizona Commerce Authority, Sandra Watson, stated that with the strategic location of Kingman coped with a skilled workforce, the facility will diversify Mohave County’s distribution and logistics landscape while bringing quality jobs to the area.
Rent Growth in Phoenix Metropolitan Statistical Area
In the Phoenix MSA, reports stated that the critical concern is inflation, with prices rising much faster than nationally. While the prices of commodities have slightly moderated, the housing market in Phoenix has snowballed with skyrocketing prices increasing that inflation above the national average.
Hence, the decrease in housing accessibility in the third quarter of 2022. Data from the NAHB-Wells Fargo Housing Opportunity Index stated 22% of homes sold in Phoenix MSA in the third quarter were affordable to families making a medium income.
With the anticipated development of a seven-story, 319-unit, the entity Modera Rio Salado, Marc Bonilla, received the go-ahead from The Tempe City Council for its construction. The results will exceed 400,000 square feet in a 5-acre site and 3,428 square feet of commercial rent space on the ground floor.
According to Bonilla, he is in conversation with restaurants and specialty grocery stores as possible tenants for the commercial space. According to Bonilla, the total cost for Modera Rio Salado’s development is roughly $200 million.
According to AZ Big Media, occupiers are willing to pay more than property owners ask as they struggle to find available space, particularly in the bulk warehouse category. According to AZ Big Media, the base rents in Phoenix industrial space climbed 12.1% yearly, the eleventh-highest increase in the nation.
According to Phoenix First Vice President Evan Koplan, “the current supply levels are unable to maintain with the increasing demand from locals. In addition, out-of-state companies that are attracted to the area’s high standard of living, relatively lower operating cost when compared to coastal regions, skilled workforce and business-friendly environment. Hence, the reason for continued rent growth.
Population Growth in Phoenix Metropolitan Statistical Area
Concerning absolute population growth, Phoenix highlights as the city with the most considerable total population growth between 2010 and 2020. According to the United States Census Bureau, within the United States, both natural population growth and the number of people moving have been on the decline in recent years.
The Consumer Affairs Research Team recently analyzed the census data from 2010 to 2020, providing Phoenix grew by over 62,000 people and is currently the fourth-largest city by population in the United States.
According to a survey conducted on the reasons new residents migrate to Phoenix, 30% of respondents cited job opportunities as their reason, 20% cited affordability, and 12% cited lifestyle as their reason. However, the location’s natural beauty, boasting the popular tourist destination, Grand Canyon, and scenic natural parks are enough to pull individuals to the destination.
The City of Phoenix reported 25,194 new Phoenix residents in 2021, slightly below the 10-year average of 25,912. However, Phoenix continues to take the largest share of Maricopa County’s population growth, with nearly four in 10 new county residents choosing to live in the city of Phoenix.
The U.S. Census Bureau’s 2020 estimates that Phoenix currently ranks as the location with a population of 1.7 million and has added more new residents than any other city. Phoenix’s growth rate, 1.5 percent, lags behind the county’s 1.9 percent growth rate.
Multifamily Apartment Investing in Phoenix Metropolitan Statistical Area
According to Valley Vibe News, “more than 1,900 multifamily housing units are planned or proposed for development”. Christine Mackay, City of Phoenix Community and Economic Development Director, expressed that the city of Phoenix announced a plan to address the housing shortage in Phoenix to create or preserve 50,000 homes by 2030. Mackay affirmed that these development plans and proposals happening in the North Valley and citywide directly respond to the need.
Valley Vibe News provided a listing of six potential getaway village cores projects for the future, namely Bronco Butte, 398 apartment-style units for 2022 development; 259 Townhouse Rentals, 360 Apartment –style Units; Acero Sonoran Desert, 348 apartment-style units; Village at Bronco Trail, 354 unit development, a 218 unnamed unit development, and 240 single level units to be named.
The Anthem Area Multifamily projects will include 182 townhomes, which are yet to be named, in and a 191-unit development called Avilla Vista Norte.
Overall Market Growth in Phoenix Metropolitan Statistical Area
According to Matthews Real Estate, with new constructions and numerous facilities and companies developed for 2023, Phoenix’s overall market is in high demand. The retail market, for one, has remained resilient due to buoyant demand drivers and a conservative supply pipeline.
Though the economic disruption caused a massive hiccup for the market, luckily, the Phoenix retail market is currently in an impoverished position compared to the previous year due to modernization and technology.
Matthews Real Estate shared on Phoenix Marketing Spotlight that “population growth, a diversifying economy, relative affordability, and a business-friendly environment have strengthened the Phoenix value proposition and made the metro a top market for net migration. These characteristics have attracted new residents and businesses to the region, making Phoenix one of the country’s most dynamic markets.
Rise48 Equity has completed $1.775 Billion+ in total transactions since 2019, and currently has $1.335 Billion+ assets under management, all located in the Phoenix MSA.