Exploring the Phoenix Job Market, Commercial Investment, and Housing and Rental Trends
Phoenix has seen some interesting trends in rental and housing activity, investment in development, and its job market for June 2022. Here is a summary of the recent news stories and publications exploring these areas.
Phoenix’s Explosive 25.4% Growth in Apartment Rents
According to Austin Graham of AZ Big Media, renters have significantly changed investors’ expectations about the multifamily sector. This is mainly due to them continuing to move to the more cost-friendly suburban neighborhoods and metros.
Experts thought that apartment rents would have started to stumble in 2021. However, the first three months of this year have already risen above last year’s rent growth. According to Yardi Matrix, 90 percent of the top rental growth markets saw double-digit growth in February 2022. These trends led to the multifamily transactions reaching an all-time high of $198 billion in 2021 and made up a third of all the commercial real estate investments in February of this year.
Factors supporting rent growth in the region include the long-term housing supply shortage, high migration to the Sunbelt area, increased wages, and the federal stimulus provided by the US government, which allowed many renters to pay or catch up on their outstanding rent payments.
Phoenix is One of the Hottest US Housing Markets
AZ Big Media shares that House Method recently conducted a study that ranked the hottest housing markets in the US, where Phoenix ranks at No. 2.
The study involved analyzing data on the 100 largest Metropolitan Statistical Areas (MSA’s), ranked based on factors such as population growth, affordability, and inventory.
Tampa-St. Petersburg-Clearwater, Florida, is at the top of the list of the hottest housing markets for 2022. It is followed by Phoenix-Mesa-Scottsdale, Arizona; Austin-Round Rock, Texas; Seattle-Tacoma-Bellevue, Washington and San Jose-Sunnyvale-Santa Clara, California.
DMB will Proceed with $1 Billion North Scottsdale Mixed-Use Development
According to Angela Gonzales of the Phoenix Business Journal, DMB Associates Inc. will be closing the deal on a 75-acre mixed-use project in Northern Scottsdale. The project, which is called One Scottsdale, is located north of Loop 101 on Scottsdale Road.
The land has been owned by a Scottsdale-based developer in partnership with the Marley-Corrigan Family since 2002. Before the Great Recession, the developer had invested upward of $30 million in infrastructure.
The DMB is currently selling parcels of land to different developers. They are also investing $12 million into infrastructure for future projects on the site.
A significant amount of growth has been happening in the area, including the Mayo Clinic’s $748 million expansion and purchase of state land to create a bio corridor. Developers from various sectors are lining up to take advantage of north Scottsdale projects.
Mayo Clinic will Carry Out its $748M Expansion Project in North Phoenix
Angela Gonzales of the Phoenix Business Journal says an expansion project worth $748 million is underway at the Mayo Clinic Hospital campus in north Phoenix. This project is expected to double the size of the campus and create almost 2000 jobs.
These jobs will add to the current employee base of 8,545. The construction will also allow the Mayo Medical School to be relocated to the Phoenix campus from the Mayo’s Scottsdale campus.
Four large cranes are being used to facilitate the project. The expanded operating rooms are expected to be ready for occupancy in September, and the loading dock expansion is scheduled to be finished by the fourth quarter of this year.
The vertical expansion on the east building where Physicians are housed is scheduled to be completed in August 2022. The hospital expansion on the west side will be finished by Q4 of 2022, while occupancy will start in Q1 of 2023.
A Report Reveals that Arizona is One of the Best States to Find a Job
Jeff Gifford of the Phoenix Business Journal shares that the findings by market research company Top Data reveal that Arizona is the fourth-best state for finding employment in 2022.
The report focused on data from more than 50 metrics that fell into five categories: state economy, compensation and benefits, job market, quality of life, and business friendliness.
Arizona’s advantages included its high-ranking job market category, ranking fourth in the nation. This category focused on metrics like overall growth in jobs, the unemployment rate, and employment growth. It placed at number eight in the compensation and benefits category and thirty in the cost of living category.
In the Top Data report, the Grand Canyon State placed No. 16 for the state economy and No. 17 for business friendliness.
Yield Engineering Systems has Signed a Lease for a Technology Center in Chandler
According to the Arizona Commerce Authority, the Yield Engineering Systems or ‘YES’ leased 123,000 square feet in the Price Corridor in Chandler, Arizona. It will support the Yield Engineering System as it serves the semiconductor industry. The facility will also create 100 jobs.
YES is involved in the development and manufacturing of thermal, deposition, and wet process equipment used in life sciences, semiconductor, and display manufacturing. The facility in Chandler will be the site of a “Technology Center” with R&D functions, advanced manufacturing, cleanroom operations, office space, and customer support.
The YES facility in Chandler adds to the established semiconductor industry in the state. Over the last six months, EMD Electronics revealed the expansion of its chemical delivery systems business at a factory located in Chandler. This adds 100 jobs, and Edwards announced that there would be a new manufacturing facility in Chandler that will create 200 jobs.
Telecommunications Company, Viasat will Add 1500 New Jobs to Tempe
Corina Vanek of the Arizona Commerce Authority reports that California-based satellite communications company Viasat is expanding in Tempe. This will result in the development of over 300,000 square feet of space at the ASU Research Park and intends to expand its headcount by 1500 employees.
Viasat already has a presence at the ASU Research Park, one of ASU’s innovation zones. The university owns the land, and the office space is leased to private companies. The company plans to create three phases of development on 16 acres near the middle of the ASU Research Park.
The jobs that will be created include positions in engineering, chiefly software engineering, and operational and back-office roles. Company officials explained that some factors that led them to expand in Tempe include the availability of talent, favorable business climate, and affordable cost.
Arizona is Projected To Add More Than 700,000 Jobs By 2030
According to the Arizona Governor, Arizona can expect over 700,000 jobs in the next decade. This indicates the state’s economic strength coming out of the pandemic.
The Arizona Office of Economic Opportunity (OEO), which focuses on the state’s economy and labor market trends, says that Arizona’s strong economic growth will surpass the nation as a whole.
The OEO report reveals that Arizona employment is projected to increase from 3,030,216 jobs in 2020 to 3,751,905 jobs in 2030. This equals an increase of 721,689 jobs, or 2.2 percent annual growth. This will be more than three times the expected growth rate for the US over the same rate. The US employment rate is expected to grow by 0.7 percent yearly, while Arizona anticipates a 2.2 percent growth annually.
The most significant job gains are anticipated for the Education and Health Services (23,906 jobs yearly) and Professional and the Business Services sectors.
Arizona 2020-2030 Projected Employment Report
According to AZ Commerce, Arizona is expected to add almost 721,689 jobs over the next decade. This would mean an increase from 3,030,216 jobs in 2020 to 3,751,905 jobs in 2030. This is a 2.2% annualized growth compared to the US overall employment, which is expected to grow 0.7% yearly between 2020 and 2030.
The gains are expected across ten significant sectors in the state, where Education, Health Services and Construction are projected to record the fastest job growth rates. While the Education and Health Services and Professional and Business Services are expected to record the most significant numerical job gains.
Government employment is expected to see a loss of -0.2% annualized growth. Furthermore, Natural Resources and Mining and Other Services are
projected to record the slowest growth rates. Natural Resources and Mining and Information are expected to see the fewest numerical job gains.
Phoenix Area Economic Summary
The US Bureau of Labor Statistics has shared its summary of a sampling of economic information for the Phoenix area about unemployment, employment, wages, prices, spending, and benefits.
It was revealed that in April 2021, the unemployment rate in Arizona was 5.5%, while in April of this year, it was 3.2%. The over-the-year changes in employment for nonfarm payrolls and employment in major industries in the Phoenix Metro Area between 2021 and 2022 is 3.8%.
In April 2022, the 12-month percent change for Consumer Price Index for Urban Consumers (CPI-U) on all items was 11.0% in the Phoenix Metro Area and 8.3% for the US City average. The average hourly wage for occupations in the Phoenix Metro Area is $27.22, while for the US, it is $28.01.
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