September Phoenix MSA Market Update: Economic Growth & New Developments
The Phoenix MSA continues to be a powerhouse of economic activity and innovation. This month brough significant developments across various sectors, showcasing the valley’s ongoing transformation and appeal to investors, businesses, and residents alike. From a surge in real estate activity to the launch of major educational and infrastructure projects, Phoenix is solidifying its position as a dynamic and diverse economic hub.
Economic Momentum: Key Developments in the Phoenix MSA
Major Expansion at Phoenix Sky Harbor International Airport
Phoenix Sky Harbor International Airport is considered one of the best airports in the entire country according to the latest J.D. Power airport satisfaction report. The J.D. Power 2024 North America Airport Satisfaction Study, released Wednesday, gives SKy Harbor a score of 633 out of 1,000, which ranks as the third best score in the Mega Airports category for overall customer satisfaction. (Frontier Newsroom).
In addition to climbing the ranks for customer satisfaction, Phoenix Sky Harbor International Airport and Frontier Airlines is expanding its presence with 11 new routes starting in October and November, signaling strong growth in the region’s travel and tourism sector. This expansion mentioned by PBJ further strengthens Sky Harbor’s position as a key transportation hub, facilitating both business and leisure travel.
Maricopa County’s Push for Skilled Workforce in Construction
The Maricopa County Community College District (MCCCD) has announced initiatives to address the growing demand for skilled labor in Arizona’s construction industry. The Arizona Office of Economic Opportunity anticipates adding 37,000 construction jobs to Arizona by 2031. “There’s a necessity for construction employees across Arizona, especially in Maricopa County, where the demand is above the national average,” says Steven R. Gonzales, Ed.D., the chancellor of MCCCD. Gonzales then told PBJ, “Colleges are crucial in offering a variety of programs for commercial and residential disciplines so that students are competitive in the job market today.”
The district is launching programs aimed at providing students with hands-on training, ensuring a steady pipeline of talent for the industry. This development is crucial, considering the ongoing construction boom in the Phoenix MSA, particularly in the multifamily real estate sector.
Arizona Sub-Zero, Cove, and Wolf Grand Opening in Goodyear
The Luxury appliance manufacturers Sub-Zero, Cove, and Wolf have opened their new facility in Goodyear. This $118 Million project is expected to create at least 143 new jobs with average annual wages of $52,000 over the next five years. Scott Wearing, the senior vice president of operations and product for Sub-Zero said, “We’ve got a track record here. We know the workforce, the talent, and the people.”
Attracting high-quality talent is one thing, but Sub-Zero also loved the proximity to its Goodyear plant nearby and the chance for those facilities to collaborate. This state-of-the-art manufacturing and distribution center represents a significant investment in the region and is expected to create hundreds of jobs. The company’s choice of Goodyear reflects the area’s growing reputation as a prime location for high-tech manufacturing and logistics operations. (PBJ).
Labor Market and Business Expansion
Phoenix: One of the Hottest Labor Markets in the U.S.
Phoenix is labeled as one of the hottest labor markets in the country, with strong job growth and low unemployment rates. The city ranked number 11 out of 55 markets of populations with one million or more residents. A recent PBJ article says that the valley’s annual pay growth was up 5.2% from July ‘23 to June ‘24. Its highest being in construction, increasing 6.4% to $22 per hour – in the 80th percentile.
Top industries in the Phoenix market are financial, leisure and hospitality, and construction. The region’s ability to attract and retain a skilled workforce is a key factor in its economic growth and an important consideration for multifamily investors looking at market fundamentals.
Air2O Launches Internship Program with West-MEC
In a move to foster local talent and provide real-world experience to students, Air2O has partnered with West-MEC to launch a new internship program to spur future interest in manufacturing jobs. This initiative aims to equip students with practical skills in HVAC technology, aligning with the region’s growing demand for skilled technicians.
Programs like this not only benefit the students but also contribute to the sustainability of the local workforce, ensuring a steady supply of skilled labor for the industry. Air2O focuses on hybrid, real life, on-the-job training. The company’s chief operating officer, Tom Sullivan, told PBJ, “You could work for an HVAC service company. But instead of doing so in a residential neighborhood, you could be in our facility, building large units worth billions of dollars and learning about new, not mainstream career paths.”
Semiconductor Manufacturing Facility Eyes Peoria
A semiconductor company is considering Peoria for a new 600,000-square-foot manufacturing facility, which would be a significant addition to the region’s technology sector. If finalized, this development would bring high-paying jobs (1,500 direct jobs and 4,500 construction jobs) and further diversify the Phoenix MSA’s economy. The presence of high-tech industries in the area suggests a robust local economy and an increasing need for quality and favorable housing opportunities (AZ Central).
Infrastructure and Minimum Wage Increase
Arizona Minimum Wage Set for Another Increase
Arizona’s minimum wage is set to increase again starting on Jan. 1, 2025, rising from $14.35 to $14.70 per hour. Following a report on the latest Consumer Price Index from the U.S. Bureau of Labor Statistics. This adjustment reflects the state’s commitment to improving the standard of living for workers and keeping pace with inflation. The increase in minimum wage is expected to have a positive impact on consumer spending, further stimulating the local economy (ABC).
International Paper Co. Secures Major Industrial Lease in Phoenix
International Paper Co. has secured a significant industrial lease in Phoenix, reflecting the ongoing growth in the region’s industrial real estate sector. The global producer of packaging and pulp recycling company’s expansion into Phoenix highlights the area’s strategic advantages for distribution and manufacturing operations. This development is part of a broader trend of increased industrial activity in the Phoenix MSA, driven by its strategic location and robust infrastructure. (PBJ).
Community and Business Impact
Arizona Companies on the Inc. 5000 List
Inc.’s yearly list ranks companies’ self-reported growth in revenue and highlights the companies with the highest percentage of growth during the recent three years. This year, 136 Arizona companies made it to the Inc. 5000 list of the fastest-growing private companies in the U.S., a testament to the region’s vibrant entrepreneurial ecosystem. The presence of so many high-growth companies in Phoenix is a strong indicator of the region’s economic vitality and its attractiveness for new business ventures. See the full list on a recent article from AZ Big Media.
Small Business Awards and Earnings Growth
Arizona’s small businesses have been recognized for their achievements, with several companies receiving awards for their performance and contribution to the local economy. There were 16 finalists selected from a pool of 55 nominees in different company size categories like micro, small, and midsize, per PBJ. Additionally, Paychex reports that small business earnings growth in Arizona remains strong, outpacing national averages. Arizona was one of just eight states with hourly earnings growing by 3% or higher. This continued success of small businesses is crucial for the overall health of the Phoenix MSA’s economy and has positive implications for the local real estate market. (PBJ).
The Future of Multifamily Real Estate in Phoenix MSA
Imagine LEarning Opens New Global HQ in Tempe
Imagine Learning Foundation (ILF) has opened its new global headquarters in Tempe, further enhancing the region’s reputation as a hub for innovation and education. The company’s choice of Tempe for its headquarters reflects the city’s appeal to technology and education-focused businesses. To date, ILF has awarded more than $1.2 Million in grants to non-profits focused on student well-being. The company is deeply rooted across Arizona, where it’s serving 100+ districts within the state. (Business Wire).
Conclusion: September 2024 Recap
September 2024 was another month filled with significant growth and development for the Phoenix market, further solidifying its reputation as a thriving economic hub, making it a magnet for new businesses and residents. From major expansions in travel and manufacturing to a robust labor market and rising demand for housing, Phoenix continues offering promising opportunities for all. The region’s diverse economic drivers – ranging from tech and education to healthcare and construction – are fueling demand for both commercial and residential spaces moving forward. With its sustained growth trajectory, strategic developments, and a growing workforce, Phoenix remains a prime location for economic resilience and a compelling region to continue focusing on.
About Rise48 Equity:
Rise48 Equity is a Multifamily Investment Group with local offices in Phoenix, AZ, Dallas, TX, and Charlotte, NC. “At Rise48 Equity, we provide opportunities for accredited and non-accredited investors to protect and grow their wealth and achieve passive cash-flow. Our team brings expertise to acquire, reposition and return capital to investors upon reaching our business plan. Through our research and strategically formed partnerships, we acquire commercial multifamily apartment properties, strategically add value to the properties, and create passive income for our investors through cash-flow and profits from sale.”
Since 2019, Rise48 Equity has completed over $2.27 Billion+ in total transactions, and currently has $1.83 Billion+ assets under management located in Phoenix, Dallas, and Charlotte. All of the company’s assets under management are managed by Rise48 Equity’s vertically integrated property management company, Rise48 Communities.
