Arizona’s rise as a major tech hub — known as the “Silicon Desert” — is having a seismic impact on its commercial real estate landscape. Over the past few years, the state has seen massive injections of capital and project activity from semiconductor, AI, data center, and clean‑tech companies, fundamentally reshaping CRE demand across multiple asset classes.
Industrial & Manufacturing
With titanic projects like Taiwan Semiconductor Manufacturing Company (TSMC) — now investing over $165 billion in multiple fabs in north Phoenix — developers are racing to create an ecosystem of suppliers, logistics, housing, retail, and hospitality to support a growing workforce. Surrounding submarkets such as Buckeye, Peoria, and Chandler are experiencing explosive industrial land acquisitions — from single‑digit to triple‑digit price-per-foot valuations — and thousands of new workers relocating to the area .
Data Centers & AI Infrastructure
Phoenix has become one of the top data‑center markets in North America — ranking 3rd in capacity absorption and 4th nationally in total inventory. Recent land acquisitions, like Tract’s $136 million purchase of a 2.1‑k‑acre Buckeye parcel and a $51 million data‑center land deal in Arizona, underscore growing investment momentum. Demand for high‑power, AI‑scaled facilities is pushing vacancy rates to historic lows and triggering a surge in planning activity.
Office & Mixed‑Use
Tech jobs in Phoenix grew by 13.4% from 2021–22, propelling the metro into the top 10 North American tech hubs for office-leasing growth. University-linked submarkets such as Tempe, with ASU-adjacent office clusters, saw rent hikes of 14%, driving redevelopment of underutilized urban sites into mixed‑use projects blending office, residential, retail, and transit access.
Looking ahead, CRE professionals in Arizona must pivot toward flexible industrial, hyperscale tech, and hybrid‑office spaces, paired with sustainable infrastructure — especially water and energy systems — that can support the demands of modern tech development. The integration of residential and ancillary services around industrial and data‑center campuses is rapidly creating self‑contained innovation districts. For investors and developers, the opportunity is clear: aligning with Arizona’s tech growth curve isn’t just smart — it’s essential.
PLAZA COMPANIES IS THE PREMIER CHOICE IN COMMERCIAL OFFICE REAL ESTATE
