PHOENIX MSA UPDATES – DECEMBER 2021
As 2021 comes to a close, we see where the US housing market has been affected by Covid-19 plus increased remote working. Phoenix’s housing market, specifically, has seen various trends such as increased investments and increased home values that have caused a year for real estate that will go down in history.
2021 Housing Market Trends
According to AZ Big Media, the Covid-19 virus and remote work have changed US home-buying patterns. This report is by Redfin, a tech-powered real estate brokerage.
Some of the trends seen this year included that home-sale price saw the highest median in market history, and the number of homes on sale was the lowest of all time. The limited number of listed homes made more people willing to buy as soon as they were listed. Many homes listed on the market were sold quickly, and the typical house stayed on the market for only 15 days.
Most of the homes were sold above the listed price, mortgage rates dropped to about 2%, and there was a great demand for second homes. Additionally, about 18% of the homes bought were by investors, and a third of Americans were interested in moving to a metropolitan area.
Downtown Mesa has been Transformed with $500M in Development Projects in Progress
According to Brandon Brown of the Phoenix Business Journal, Downtown Mesa, a town that was previously only known for its potential, now has over $500 million worth of projects to be developed. Downtown Mesa was once a booming area, particularly in the 1960s and ’70s. However, when the US 61 was built there, many people, including businesses, overlooked the area, and it eventually became a ghost town.
Some of the businesses that moved to the city said they chose the area because of rent affordability. The area’s development has also been boosted from the help of the Church of Jesus Christ of Latter-day Saints, whose temple is located on Main Street and East of Mesa Drive. The church constructed a large residential complex called Grove on the Main.
Downtown Mesa is expected to continue growing, with the next big project expected to be started by Arizona State University.
Luke Logistics move to Arizona
AZ Big Media reports that CA Industrial or ‘CA’ will break ground for the first phase of the Luke Logistics Center. This will be located in Glendale, Arizona, resulting from a joint venture partnership deal between DWS/RREEF and CA Industrial.
The project will help to support the growth of the e-commerce industry. The ground breaking represents the expansion of CA into the dynamic Sun Belt market. It will strengthen the CA Industrial portfolio in the market, which is seeing a great demand for warehouse and distribution space.
The four-building site will include 90-acres that can hold a total of 1.5 million square feet of industrial facilities. The development has been designed to LEED standards and will be able to facilitate warehousing, logistics, manufacturing or data centers, distribution, and more.
3.54 Acres of Land is Sold for $1.95 Million
According to AZ Big Media, a local investor was able to get an excellent deal after purchasing 3.54 acres of land for $1.95 million in the city of Chandler. This was a good opportunity because property is currently hard to come by due to a shortage of land.
The buyer, Klusman Family Holdings, LLC, was represented by Rommie Mojahed, Director of Retail Leasing and Sales Investment with Phoenix’s SVN Desert Commercial Advisors. The seller is Brent Hickey with Copperstate West Inc. Hickey has had the parcels of land for years and decided it was the right time to sell.
The property is situated on the corner of McQueen and Pecos Road and is close to the Chandler Airport and the 87 Freeway.
Phoenix is a Major Spot for Residents Moving from LA
AZ Big Media says that Redfin.com, a tech-powered real estate brokerage, saw a significant number of Americans looking to move to a new metropolitan area in October. For Los Angeles residents, their main area to relocate is Phoenix.
In October, the metro areas that saw more Redfin.com users seeking to leave than any other metro area include Washington, D.C., New York, Seattle, Los Angeles, and San Francisco. The more expensive cities see more people leaving as remote work, which has become more popular since the pandemic, has made it possible for people to leave their cities in search of more affordable areas.
54 Acres of Land gets Sold for $6.25 Million in Buckeye
According to the AZ Big Media, fifty-four acres of land in Buckeye have been acquired by Shopoff Realty Investments (also called “Shopoff”), a national real estate firm, and Contour, a private real estate and development company. The joint venture partners will use the site for warehouse logistic reasons.
Commercial real estate tracking site Vizzda revealed that the land was sold for $6.25M or $120,676.90 per acre. It will include two warehouse buildings for logistics use that will stretch across almost 900 square feet. The property is adjacent to Union Pacific Rail Line and provides easy access and more opportunities for direct rail capabilities.
There is hope for success in the region which has seen an increase in e-commerce and logistic firms in recent years.
Global Retail Company Signs Industrial Lease in Glendale
Audrey Jensen of the Phoenix Business Journal reports that Williams-Sonoma Inc., global kitchenware and home furnishings retail company, recently leased approximately 1.2 million square feet of space in The Cubes in Glendale. Williams-Sonoma Inc is the parent organization of West Elm, Pottery Barn, Rejuvenation, and Mark.
In February, a company using “Project Jaguar” as a code name sought around 250 acres needed for 3 million square feet of distribution and light manufacturing space. The company, which is speculated to have been Williams-Sonoma, wanted to develop Buckeye. However, several sources report that the company decided to locate in Glendale instead.
It is reported that initially, the project would hire around 3,000 full-time workers who would receive an average salary of $45,000 and take on about 1,000 seasonal workers. However, it is confirmed if they still want to hire 3,000 full-time workers or that the facilities will be used for both light manufacturing and distribution when construction is complete.
Home Values Expected to Increase in the Valley in 2022
Evelyn Nielsen of AZ Big Media reports that since recovering from Covid-19, the Valley has seen new heights in its home values and real estate market.
Real estate experts and Zillow’s economists report that Austin, Texas is in the first place as it relates to the hottest housing markets. According to the online real estate marketplace, Austin is followed by Phoenix, whose annual appreciation was 31.8% in August 2021, making it the second-fastest.
In April, home sellers Gary and K.K. Brown sold their home in Phoenix at the asking price. They wanted to downsize later on but chose to do it now instead due to the housing market’s high rates. They were advised by their realtor to list their house higher than they had initially planned. It was listed at around $140,000 higher than they originally anticipated, and within four hours of being listed, it was sold.
Zillow says homes in Phoenix-Mesa-Scottsdale Metro are valued at $418,170 and, over the past year, have increased by 32.7%. Zillow expects a 20.8% increase in home values for the coming year and predicts that the fast growth of the Valley will influence the continued increase in its home appreciation.
LaPour Partners Industrial Land Sale Price is the Highest in Phoenix’s History
AZ Big Media reports that LaPour Partners closed out an industrial park of 65 acres in North Phoenix. This transaction marks the highest price for industrial land in Phoenix market history.
Parc Pinnacle, located on Pinnacle Peak Road in the Deer Valley submarket, was sold for $8,650,322 earlier this month. This is a record sale where the price-per-square-foot was $19.75. The property is home to an Amazon fulfillment center and 325,000 square feet of multi-tenant space. For more than 20 years, LaPour Partners has been active in the Phoenix market.
La Pour Partners, based in Las Vegas, has gained more popularity through its recent industrial projects across Arizona.
Other recent activities in the area include the sale of the AC Marriott Hotel in downtown Phoenix and a new development near Mesa for industrial purposes.
Stryker Leases New Facility in Chandler
AZ Big Media reports that Chandler will now be the location of popular medical technology company Stryker. The company will be leasing a 104,000-square-foot manufacturing facility to aid in the expansion of its sustainability solutions operations. Production will start at the company around mid-2022 and will create over 280 jobs in Arizona in the coming years. The jobs will include production associates, technicians, and engineers.
The Sustainability Solutions division is responsible for reprocessing single-use medical devices where used devices are collected and then cleaned, tested, repackaged, and given back to hospitals.
Stryker is a Fortune 500 company that could have chosen anywhere to set up, and they chose Chandler. Stryker’s investment in the area is welcomed as well as the job opportunities that the facility will give residents.
Skylar’s continued investments in Arizona will bring hundreds of high-paying jobs and will also strengthen Arizona’s place as a leader in manufacturing and technology at an advanced level.
Mayo Clinic Buys Land in Biotech Corridor
AZ Big Media recently reported that Mayo Clinic has acquired 228 acres of land near its campus in North Phoenix. The land was purchased from the Arizona State Land Department at public auction on December 15 and will be used to expand Mayo Clinic’s patient-centered model of care.
A goal of Mayo Clinic, the City of Phoenix, the State of Arizona, and Arizona State University has been to develop this area of North Phoenix to support Mayo Clinic’s strategic vision and the “Discovery Oasis” biotechnology corridor.
“Leading in the transformation of health care on behalf of patients everywhere is central to Mayo Clinic’s strategy. We believe the acquisition of this land is one of these opportunities, giving us a new canvas to co-create with innovators in science and biotechnology,” said Gianrico Farrugia, M.D., CEO for Mayo Clinic.
This is one of the largest capital expansions in the history of Mayo Clinic, and is reported to bring nearly 100 new patient beds, as well as outpatient, education, and research spaces by the close of 2023.
Rise48 Equity has completed $585,116,000 in total transactions since 2019, and currently has $457,616,000 of Assets Under Management, all in the Phoenix MSA.
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