Phoenix, AZ Economic Overview
Also known as the “Valley of the Sun", the city of Phoenix is home to over 1.6 million people, making it the sixth-largest city in the U.S. And that’s before you account for the more than 22 million tourists that visit Phoenix each year. When you add it all up, it makes for a strong economy, which sustains the vibrant Phoenix commercial real estate market
Phoenix’s biggest industries include manufacturing, tourism, financial services, technology, aerospace, and healthcare. The Phoenix Sky Harbor International Airport ranks as the 11th-busiest in the U.S. and 29th in the entire world, serving over 40 million passengers per year, which makes the city both a major hub and an expansive consumer market. Furthermore, with one of the fastest growing economies and populations in the country, the Phoenix real estate market continues its healthy growth.
Phoenix, AZ Commercial Real Estate Market
The Greater Phoenix area is the center of the state’s economy, accounting for over 80% of job creation in Arizona. The area includes over 130 million square feet of office space, and is home to the headquarters of such diverse major companies as electronics giant Avnet, hotel chain Best Western, moving company UHAUL International, Fortune 500 mining group Freeport-McMoRan, pet chain PetSmart, and the Aerospace division of Honeywell.
The Downtown Phoenix office market is the city’s central business district, home to a large number of financial and legal services companies, including the regional headquarters for major banks like Wells Fargo, JP Morgan & Chase, and Bank of America. It’s also a home to cultural and artistic institutions, like the Phoenix Symphony Hall, as well as two of the city’s professional sports teams, the Arizona Diamondbacks and Phoenix Suns.
The Midtown Phoenix office market revolves around the Central Avenue Corridor and is one of the largest business hubs in the area, employing nearly 60,000 people in areas like financial services and technology, part of the “Silicon Desert".
The Scottsdale office market is dominated by a combination of tourism, which accounts for over 1/3rd of the area’s economy, and the Scottsdale airpark, which is home to roughly 3,000 companies and more than 55,000 employees, making it one of the largest overall employment centers in the Phoenix metro area. It’s also home to one of the Mayo Clinic’s three locations.
Camelback Corridor is an upscale area of Phoenix centered around finances, retail, and dining, with over 120,000 square-feet of space currently being added to the Camelback Corridor office market.
Phoenix, AZ Office Rental Rates ($/SF/year)
Data provided by Yardi Matrix, for properties larger than 50K SF.
Phoenix, AZ Office Sales
Data provided by Yardi Matrix, for properties larger than 50K SF, which sold at over $5M.
Phoenix, AZ Commercial Inventory Breakdown
Total: 58,077,672 SF
By square footage range:
- 50k to 100k SF: 14,454,774 SF / 24.89% of total office
- 100k to 500k SF: 38,450,780 SF / 66.21% of total office
- 500k to 1M SF: 5,172,118 SF / 8.91% of total office
- Class A: 27,860,521 SF / 47.97% of total office
- Class B: 28,271,900 SF / 48.68% of total office
- Class C: 975,528 SF / 1.68% of total office
Total: 87,871,800 SF
By square footage range:
- 50k to 100k SF: 3,894,740 SF / 4.43% of total industrial
- 100k to 500k SF: 61,448,534 SF / 69.93% of total industrial
- 500k to 1M SF: 12,743,985 SF / 14.5% of total industrial
- > 1M SF: 9,784,541 SF / 11.14% of total industrial
- Class A: 40,016,667 SF / 45.54% of total industrial
- Class B: 38,057,478 SF / 43.31% of total industrial
- Class C: 5,438,196 SF / 6.19% of total industrial
Employment in Phoenix, AZ
Manufacturing and tourism have long been major parts of Phoenix’s economy and that continues to this day, but the area’s economy has greatly diversified since then. In total, there are over 2 million people employed in the area.
The biggest employment sectors in Phoenix are:
- Office and Administrative Support - Roughly 13% of Phoenix’s workforce are government employees, with nearly 75,000 people combined working for the City of Phoenix, Maricopa County, and State of Arizona;
- Sales and Retail - Phoenix’s largest occupation is retail salesperson. The Fortune 500 retailer PetSmart has its headquarters here, and Wal-Mart Stores employs over 30,000 people alone;
- Food Services - Around 9% of Phoenix’s total employment comes from food preparation and service, owing partially to its large tourism industry.
Other major sectors in Phoenix include:
- Manufacturing - Phoenix is home to the headquarters of Fortune 500 electronics corporation Avnet, as well as the second-largest Intel site in the world, which employs over 10,000;
- Tourism - The area receives over 22 million tourists per years and is the home to the Best Western hotel chain’s headquarters. US Airways also employs 9,000 in Phoenix;
- Financial Services - Three of the city’s top 10 employers are in the financial services sector, including Wells Fargo, Bank of America, and JPMorgan & Chase;
- Healthcare - Banner Health, Dignity Health, and the Mayo Clinic are among the top employers in the healthcare industry, which has seen tremendous growth in Phoenix since 2002.
Overall, employment is abundant in the Phoenix office market and includes such diverse industries as banking and finance, technology, biomedical services and research, retail, and hospitality.
Education in Phoenix, AZ
The Phoenix area is served by 33 different school districts, including one of the largest high school districts in the country, the Phoenix Union High School District. Higher education in the area includes Arizona State University, one of the largest public universities in the U.S., with campuses in Tempe, Downtown Phoenix, and Northwest Phoenix. Phoenix is also home to a campus of the University of Arizona School of Medicine, the community college Phoenix College, and the Barrow Neurological Institute, the largest institution in the world for neurological disease treatment and research.
Commuting Time in Phoenix, AZ
The average commute time for the city of Phoenix is only about 15 minutes, with trips increasing to around 26 minutes for the greater Phoenix metro area.
While nearly 97% of commuters rely on cars and car pooling, there’s also an efficient light rail system, the Valley Metro Light Rail, which is one of the busiest in the country. The rail serves over 40,000 passengers each weekday, and runs from 4:40am to just after midnight, Monday through Thursday and on Sunday. Service hours are extended to 3am on Friday and Saturday night nights.
You can find schedule and fair information for both the light rail and the Valley Metro’s bus service here: http://www.valleymetro.org
- Total Population1,514,208
- Male Population(49.9 %) 755,143
- Female Population(50.1 %) 759,065
- Median Age33.20
- Average Household Income$66,345
- Median Household Income$47,326
- Median Income Under 25$27,166
- Median Income 25-44$48,236
- Median Income 45-64$55,231
- Median Income Over 65$39,053
- Ahwatukee Foothills Demographics
- Alhambra Demographics
- Amber Hills Demographics
- Biltmore Demographics
- Camelback East Demographics
- Central City Demographics
- Deer Valley Village Demographics
- Desert View Demographics
- Downtown Phoenix Demographics
- East Pheonix Demographics
- Encanto Village Demographics
- Estrella Village Demographics
- Maryvale Demographics
- North Mountain Village Demographics
- Paradise Valley Village Demographics
- Riordan Ranch Demographics
- Sonoran Foothills Demographics
- South Mountain Highland Terrace Demographics
- Valley Vista Demographics
Residential Rents in Phoenix, AZ
When choosing the best place for a business, location research is very important – not only for the office, but also for the employees’ convenience.
The rental market in Phoenix is quite affordable for a city of its size, with the average 1-bedroom renting for around $814 per month and the average 2-bedroom for roughly $958.
Phoenix, AZ Average Rental Price, November 2018
- $ 935/mo
- Studio: $ 687
- 1 Bedroom: $ 863
- 2 Bedrooms: $ 1,018
Phoenix, AZ Rent Trends
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