Tempe, AZ Economic Overview
Located at the center of the Phoenix Metropolitan area, Tempe is a vibrant urban oasis. The culture of more than 161,000 people living in the city is welcoming, distinct, vibrant and entrepreneurial. A laid-back atmosphere, fun-filled recreational activities, world-class educational opportunities, beautiful weather and an excellent transport system make Tempe one of the best places to live. Its prime location, combined with a proactive approach to business development and a favorable tax structure creates an ideal climate for businesses to thrive. Therefore, the Tempe commercial real estate market is arguably the hottest in Arizona.
With upwards of 10 million annual visitors touring the region for its warm weather and sunshine, tourism remains a crucial driver of Tempe ’s economy. In recent decades, however, the city has moved towards the technology, manufacturing and service industries. Insight Enterprises, a Fortune 500 company, and other corporate juggernauts such as GoDaddy, KPMG, Wells Fargo and LifeLock are some of the biggest businesses headquartered in Tempe. This can be attributed to the young, highly educated, tech-savvy population and excellent transport network in the city.
Tempe boasts a vibrant entertainment, shopping, and arts culture. Performance venues, such as the Tempe Center for the Arts, and hundreds of wholesale and retail shops make it an attractive shopping and entertainment metropolis.
Tempe, AZ Commercial Real Estate Market
Tempe has a variety of business parks and prime land available for development into Class A office spaces, manufacturing spaces and residential spaces. There are acres of prime land and space along the Tempe Town lake, in historic buildings, along the light rail corridor and at the state of the art ASU research park.
Downtown Tempe has Arizona State University to the east and Tempe Town Lake to the north, all uniquely interconnected by an impressive transport system. From its ever-expanding shopping district to its recent influx of high-rise commercial and residential developments, its growth is apparent everywhere you turn. Downtown Tempe office space especially on the northern end, accounts for a large percentage of Tempe office space. The abundance of locally owned restaurants, nightclubs, and retailers in the town supply over 20,000 jobs. Downtown Tempe is also host to the city’s major employers including LIfeLock, Silicon Valley Bank, Microsoft and Waste Management.
South Tempe consists of lower-density office parks, strip malls, and single-family homes, unlike the northern part, which has an ever-growing skyline. Being a family-friendly area, South Tempe’s Sandahl neighborhood is mainly residential. However, it also boasts a large cluster of retail shops and dining locations.
Tempe Marketplace is the center for shopping and entertainment. It is packed with eateries and retail shops covering over 1 million square feet. Popular retail shops and eateries have set up shop here including Cold Stone, Victoria’s Secret, H&M, Target and DownEast Basics.
Tempe Town Lake is one of Arizona’s premier locations. The Hayden Ferry Lakeside development offers centrally located, urban waterfront property. With light rail access, Town Lake is well connected to its neighboring downtown Tempe’s Mill Avenue, Sky Harbor International Airport, and Arizona State University. The Town Lake waterfront neighborhoods of Rio and Peterson Par k offer residential and business opportunities alike, with both land and office spaces available for redevelopment. Top corporations including KPMG, Fidelity National Title, State Farm and Silicon Valley Bank have a Tempe Town Lake office space.
Tempe, AZ Office Rental Rates ($/SF/year)
Data provided by Yardi Matrix, for properties larger than 50K SF.
Tempe, AZ Office Sales
Data provided by Yardi Matrix, for properties larger than 50K SF, which sold at over $5M.
Employment in Tempe, AZ
With the largest concentration of technology firms, the densest industrial area and highest concentration of businesses in Arizona, Tempe is a strong and diverse economy. The City of Tempe, the three school districts, and Arizona State University have been Tempe’s largest employers for a long time. However, the thriving real estate market, biotechnology, and financial sector might soon overtake these traditional employers.
Currently, Tempe’s major employers are:
- Education – ASU is the largest employer in the city. Together with MCC, they employ a combined workforce of over 12,000 employees. Tempe Elementary School District 3 is also one of the top 10 employers in the city;
- Aerospace – U.S. Airways, formerly known as American Airlines employs 2,537 workers;
- Business and financial sector – Wells Fargo & Co, Bank of America Corp, JP Morgan Chase & Co;
- Administration/public sector – The city of Tempe employs 1,824 people;
- Industry& Service – The large service provider ABM Industries Inc. employs 2000 employees in Tempe. Salt River Project, which is one of the nation’s largest public power utilities, and Honeywell International Inc. employ a combined workforce of around 4,000.
Other top employers in the city include Motorola, Medtronic MicroElectronics Center, and Conoco Phillips.
Education in Tempe, AZ
Tempe, AZ is arguably one of the best college towns in the U.S. The city is the proud home to Arizona State University, voted best public research university in the U.S., according to the 2017 university rankings. Maricopa County Community College District, university of Phoenix, Ottawa University and Rio Salado Community College are also premier career Arizona schools, which are also headquartered in Tempe.
Commuting Time in Tempe, AZ
Tempe is a 20-minute commute city, thanks to its comprehensive public transportation system, which features buses, light rail and free Orbit shuttles. The city’s warm and sunny weather coupled with 175 miles of dedicated bikeways make it one of the “most bikeable" cities in the country.
This impressive transportation system makes car-free living in Tempe a possibility. You can walk, bike, ride or bus anywhere in the city within 20 minutes.
In addition to the ease of navigation, Tempe’s freeway access and proximity to the Phoenix Sky Harbor International Airport make access to anywhere in the world very easy.
- Total Population178,339
- Male Population(52.7 %) 94,065
- Female Population(47.3 %) 84,274
- Median Age28.80
- Average Household Income$69,463
- Median Household Income$51,829
- Median Income Under 25$21,074
- Median Income 25-44$57,641
- Median Income 45-64$69,905
- Median Income Over 65$49,184
Residential Rents in Tempe, AZ
As a result of new businesses establishing operations in the city, as well as existing companies expanding their presence, tenant demand growth is expected to continue rising. The Tempe commercial real estate market is thus expected to record another year of steady growth. Currently, Tempe has a median home price of $203,000, and a median rent for one-bedroom apartments of $954/month.
Tempe, AZ Average Rental Price, April 2019
- $ 1,232/mo
- Studio: $ 904
- 1 Bedroom: $ 1,010
- 2 Bedrooms: $ 1,223
Tempe, AZ Rent Trends
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