Wier Thirty 6 Business Park
The state of Arizona has been ranked among the top 5 friendliest states for business and #1 for quality and availability of workforce. Recent job growth was 3.17%, outpacing the national average of 1.59%, resulting in an unemployment rate of 3.7%, compared to the national average or 4.1%. Phoenix, the state capital is the 6th largest metropolitan city in the United States, is exceptionally healthy with GDP growth averaging 4.8% over the last two years. Its strategically central southwest location coupled with a strong labor force, relative affordability and temperate climate has enabled it to be a major business and distribution hub for aerospace, high technology, logistics, financial services, bioscience, and sustainable technology companies.
The city of Phoenix is the nation’s 6th largest metro area by population, with 4.7MM residents. The city’s growth has been driven by a disproportionately large amount of net migration when compared to other major U.S. cities, as new residents are attracted to the region’s outstanding relative affordability, quality job growth, attractive amenities and climate. In addition, the population growth is highly concentrated in young individuals entering the workforce during their prime earning years, which has resulted in robust growth of energized labor force participants. From 2010 to 2017, Phoenix’s population of 20-34-year olds grew by 15.6%, significantly higher than other millennial growth markets which includes Denver (11.1%), Seattle (10.3%) and San Francisco (6.5%).
The combination of relative affordability in real estate costs and skilled labor has given Phoenix a distinct advantage causing large corporations to either relocate or open regional offices in the metro-area. Phoenix has seen a 34% growth in technology related jobs from 2011 to 2017 and is now commonly referred to as ‘the silicon desert’, resulting from the technology-related growth pushing southeast from the traditional employment hubs of San Francisco and Seattle, which are getting exceedingly expensive. Phoenix is home to one of the nation’s largest universities, and one of the largest engineering programs with 20,000 students currently enrolled. The home-grown talent retention is a testament to the outstanding value-proposition offered to
young professionals, who can pursue a vibrant urban
lifestyle and grow into an affordable suburban living situation when ready to start a family. 68% of engineering graduates since 2010 stay in the metro-area, providing growing companies a reliable skilled labor force, while net migration continues to bring-in additional skilled workers to the market.
American Express, Honeywell’s Aerospace division, Pet Smart, & Freeport McMoRan are a few examples of national corporations that call Phoenix home. With operating costs
estimated to be 40% lower than California, many Bay Area tech firms have recently relocated or expanded large operations to Phoenix, including Uber, Yelp, Weebly, and Shutterfly.
Metro Phoenix has a general industrial inventory of 140MM sf, currently 93.2% occupied after absorbing 800K sf (net) in 2017, accounting for a 0.57% drop in market-wide vacancy. 2016 and 2015 were comparatively strong years, with net absorption numbers of 2.9MM and 2.2MM respectively, but the 2017 figure was depressed by a spike in speculative construction of midbay and big box developments.
The submarket’s strategic location makes it the perennial location for companies looking to be in close proximity to the area’s labor force and for convenient access to the entire Metro area. This has resulted in an unprecedented tenant demand, which is reflected by 96% occupancy for freestanding industrial buildings. In addition, the airport
submarket allows for tenants to conveniently reach most major housing communities in Phoenix, including both executive and workforce housing. Historically, the airport
submarket has generated a diverse group of tenants, such as R&D, distribution, small and large manufacturing, and service companies. Attracting a diverse tenant base, this paticular submarket is positioned to perform comparatively well through various market cycles.
The airport submarket is made up of 26MM sf of industrial inventory, currently 93.1% occupied after absorbing 107K sf in 2017, representing a 4% decrease in submarket vacancy. The submarket includes 15MM sf of ‘freestanding’ industrial buildings, currently 96% occupied reflective of an emphasis on the functionality of single-tenant