Scottsdale, AZ Economic Overview
Scottsdale is a vibrant city in the expansive Sonoran Desert, that is often rated as one of America’s finest communities to visit, live and do business in. Bordered by the McDowell Mountains to the east and Phoenix to the west, Scottsdale hosts the McDowell Sonoran Preserve, the biggest urban wilderness area in the country.
Scottsdale has not always been Scottsdale. It was originally named Orangedale for its large citrus groves, then later renamed Scottsdale after its founder, Winfield Scott, in 1894. The city grew in leaps and bounds, primarily as an agricultural economy before its incorporation in 1951. The ensuing decades saw a rapid growth of the city, both in area and population. This growth was spurred by a burgeoning technology industry (pioneered by Motorola) and its seasonal events like horse racing and golfing tournaments, which continue to attract visitors today.
Tourism has for a long time been the main cog in Scottsdale’s economic wheel. The city is home to over 60 resorts and hotels, which accommodate the myriad of tourists that visit throughout the year. Scottsdale’s breath-taking attractions include the McDowell Sonoran Preserve, the McCormick-Stillman Railroad Park, Butterfly Wonderland, Old Town Scottsdale and Scottsdale Museum of the West.
Since Motorola set up shop in 1950, Scottsdale has continued to grow as a high-tech-driven economy. Scottsdale is now home to dozens of technology companies like GoDaddy, Yelp and General Dynamics C4 Systems. Moreover, many San Francisco and New York-based technology companies embarking on a national expansion are choosing Scottsdale as their ideal destination.
The fastest growing industry in Scottsdale is aviation. Since Scottsdale Airpark/Airport was constructed, it has continued to grow as an employment hub, with more than 2,000 businesses located there.
Income and sales tax rates in Scottsdale are 3.36% and 7.95% respectively.
Scottsdale, AZ Commercial Real Estate Market
The Scottsdale commercial real estate market is a submarket of the Greater Phoenix metropolitan commercial market and is about 24 minutes away from Phoenix’s CBD.
Steady job growth and demand for space has strengthened Scottsdale’s office market. Scottsdale, together with Tempe and Camelback East Corridor are the most popular office submarkets due to the abundance of retailers in those regions, as well as their close proximity to Phoenix. The rental rates in Greater Phoenix are steadily rising. In the first quarter of 2017, the average rental rate was $23.47 per square foot.
Scottsdale industrial market, which is part of the Northeast industrial market cluster together with Central Phoenix and Scottsdale Airpark, had an average vacancy rate of 7.9% in the first quarter of 2017. Industrial spaces are categorized as either general industrial, warehouses, manufacturing, showrooms or flexes. At 43,647 square feet of space, the absorption rate was highest for warehouses. The general industrial space types also had a high absorption rate, of 38,340 square feet despite having the highest vacancy rate of 13.7%. The absorption rate for manufacturing spaces remained the same at 4,803 square feet from the previous year.
Scottsdale, AZ Commercial Inventory Breakdown
Total: 30,169,119 SF
By square footage range:
- 50k to 100k SF: 8,350,062 SF / 27.68% of total office
- 100k to 500k SF: 20,259,515 SF / 67.15% of total office
- 500k to 1M SF: 1,559,542 SF / 5.17% of total office
- Class A: 14,941,503 SF / 49.53% of total office
- Class B: 8,740,243 SF / 28.97% of total office
- Class C: 139,621 SF / 0.46% of total office
Total: 3,791,974 SF
By square footage range:
- 50k to 100k SF: 1,014,783 SF / 26.76% of total industrial
- 100k to 500k SF: 1,204,636 SF / 31.77% of total industrial
- > 1M SF: 1,572,555 SF / 41.47% of total industrial
- Class A: 1,536,535 SF / 40.52% of total industrial
- Class B: 2,255,439 SF / 59.48% of total industrial
Office Spaces with Retail
Total: 14,429,589 SF
By square footage range:
- 50k to 100k SF: 2,967,296 SF / 20.56% of total office with retail
- 100k to 500k SF: 5,631,080 SF / 39.02% of total office with retail
- 500k to 1M SF: 1,169,951 SF / 8.11% of total office with retail
- > 1M SF: 4,661,262 SF / 32.3% of total office with retail
Employment in Scottsdale, AZ
According to analysts at Wallethub, Scottsdale is the best place in America to find a job in 2017. The city ranked 16th in 2016, when it had an unemployment rate of 4.4% and a job growth of 3.17%.
The tourism industry is the biggest employer in Scottsdale. About 39% of the city’s workforce is employed in the sector. However, according to the City of Scottsdale Comprehensive Annual Financial Report (CAFR) of 2016, the first two single biggest employers were in the health care sector. HonorHealth and CVS Health had 6,382 and 2,800 employees, respectively. Mayo Clinic was a distant seventh, with 1,851 workers. Other principal employers in Scottsdale were:
- The Scottsdale Unified School District, with 2,583 workers
- The Vanguard Group, an investment company, with 2,500 employees
- The City of Scottsdale, with 2,148 employees
- General Dynamics C4 Systems technology company, with 1,945 employees
- National Specialty Publications, with 1,800 workers.
- McKesson Corporation, with 1,350 workers
- Yelp, with 1,000 employees.
Education in Scottsdale, AZ
Scottsdale has two main public school systems, that is, the Scottsdale Unified School District and the Paradise Valley Unified School District. Whereas the former has 33 schools, the latter has 47 schools.
Scottsdale does not boast many institutions of higher learning. The main institution is Scottsdale Community College, which has been around since 1970. The college opened a campus at the Scottsdale Airpark economic hub in 1999. Other institutions are Scottsdale Culinary Institute and a campus of the University of Phoenix.
Commuting Time in Scottsdale, AZ
The City of Scottsdale has a high cost of living. Therefore, a significant portion of its workforce lives in neighboring cities, where the cost of living is much lower. This has created heavy inbound traffic. In fact, commuting from Scottsdale is easier since it is always against traffic. An average commuter spends about 26 minutes on the road.
- Total Population246,026
- Male Population(49.3 %) 121,240
- Female Population(50.7 %) 124,786
- Median Age47.00
- Average Household Income$129,271
- Median Household Income$84,601
- Median Income Under 25$48,305
- Median Income 25-44$88,464
- Median Income 45-64$111,881
- Median Income Over 65$62,504
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