The Phoenix metro area is booming. Recently, the National Association of Realtors named the Phoenix, Mesa, and Scottsdale areas among the top 10 commercial real estate markets in the United States. The NAR selected the top 10 markets after considering 25 indicators of an area’s economic, demographic, housing, and commercial market conditions across the multifamily, office, industrial, retail, and hotel sectors.
Plaza Companies is one of Arizona’s leading commercial real estate firms, helping businesses of all kinds find the right property for them. Our expertise ranges from brokerage services and tenant improvement construction to property development and property management. Read our article below and learn why Phoenix Metro is becoming a hot market for commercial real estate.
NAR Measured Areas Based on 25 Indicators Relating to Their Real Estate Market
When looking at an area’s economic and market conditions in commercial real estate, NAR examined multiple factors. These factors include:
- GDP growth
- Unemployment rate
- Median household income
- Consumer spending
- Number of business openings
- Population growth
- Homeownership rate
- Rental vacancy rate
- Building permits
- Apartment rent
- And many more
While the COVID-19 pandemic has affected many areas of our community, NAR’s Chief Economist Lawrence Yun predicts the U.S. economy will continue to improve in 2021 with the commercial real estate market soon to follow.
“A recovering economy and the near-certain job growth will steadily lead to the absorption of commercial properties,” Mr. Yun said in a prepared statement. “The apartment rentals market could once again experience very low vacancy rates by year’s end.”
What Does the NAR Say About Phoenix Metro?
According to NAR, the Phoenix-Mesa-Scottsdale, AZ commercial real estate market is stronger compared to the overall U.S. market. During their examination, they highlighted many details that make our community stand out to businesses, such as:
- Employment: Job creation is stronger than the national unemployment rate. However, our wages are not rising as fast as they are nationally.
- GDP Growth: The Valley’s economy is growing faster than the national average. Additionally, the median household income is lower than the national average.
- Multifamily: Phoenix has a faster rent growth rate than the national average. Also, renters spend more of their income on rent than the national average. But, the rental vacancy rate is lower than the rest of the country.
- Office: New leasing volume is stronger than the national average. Office rent is rising faster here than it is nationally.
- Industrial: The industrial vacancy rate is higher than the national average, with rent rising faster than the national average.
- Retail: There are a larger share of retail jobs as well as stronger retail trade job creations
- Hotel/Lodging: Phoenix Metro also has a larger share of leisure/hospitality jobs, as well as more business openings than the national average.
How Will This Affect Phoenix Real Estate?
As you may have noticed in the last few years, many people are moving to Phoenix for a variety of reasons. These reasons range from the cost of living and our growing job opportunities to our warmer weather. One thing is certain: our new neighbors are having an incredible impact on our local economy, with no signs of slowing down.
Plaza Companies is one of Phoenix’s Leading Commercial Real Estate Firms
Plaza Companies began in 1982 with a drive to provide excellent real estate services for a range of industries. From leasing and management to construction and development, we have had our hands in many innovative commercial projects in Arizona. We are proud to be a part of the community and are excited about its continued growth. Contact us today to learn how we can help enrich your commercial property.