It’s hard not to notice the changing face of the Phoenix market, as droves of people are moving here from across the country to chase opportunities or to take advantage of a market that’s a cost effective choice for them. What makes phoenix such an attractive market for businesses and commercial tenants? There are a number of factors that make the valley of the sun one of the most advantageous places for commercial tenants to relocate their businesses.
Arizona is the 6th state in the nation for job growth and over 87% of that growth is centralized in the metro Phoenix market, meaning there is a lot of opportunity and therefore a lot of businesses that need space. In comparison to Arizona’s west coast neighbors, Arizona rents and mortgage rates are much more reasonable, where a single family home in AZ costs an average of $263,000 while the average home price in Los Angeles is somewhere around $625,000. As more people move here, existing businesses are able to expand their skilled labor force. And with consistent economic growth in the 48th state, there is more money to be tapped into, particularly by tech startups and people working in the construction industry.
Commercial office space holders are enjoying the new influx of people and businesses to the valley, as office vacancy has dropped from 25% to 12%, which might sound bad for tenants that are looking for office space for their business. However, because builders and investors see low vacancy rates and the rising population and economic growth, more money is being spent to build new and unique spaces in a city that is primed for growth and not overly expensive to operate a business in.
Retail is definitely changing and it has some people, particularly big box stores, a little uneasy. However, experiential retail is a growing sector within retail and it can never be overtaken by e-commerce. Phoenix might get hot during the summer, but it’s a city that’s relatively devoid of natural disasters or inhibiting storms and there are over 300 days of sunshine here annually. Selling people experiences and designing your retail location around the experience is becoming the new model that businesses are trying to implement. Phoenix developers may have overstretched before the recession, leading to tennous investment in retail space for the last decade, but that’s beginning to change.
Finding The Right Representation
What does this all mean for commercial real estate tenants? Two things are certain:
- Phoenix is an attractive market to get into because there is a lot of potential for continued growth in a reasonably priced economy. Who holds the upper hand between tenants owners as far as owners go is dependant on your industry and what you are looking for.
- It’s imperative that you seek out a reputable and experienced tenant representative in this attractive of a market. You might be able to find your dream space, but a bad lease could ruin it.
That’s where the team at LCI Realty can help you. Our team of experienced tenant representatives will help you find the best space for your business and make sure that you aren’t going to get a bad deal on your lease. Call our team today at 480-565-8981 to find out what we can do for you.
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