Why Property Investors Are Seeking Commercial Spaces in Arizona

Arizona’s healthy property market is highly attractive to investors looking to build a commercial property portfolio. There is no single reason for the robustness of the market. Rather, it’s a combination of a growing economy, population growth, infrastructure investment, geographic advantages, and a favorable business environment.  

From bustling urban centers like Phoenix and Tucson to emerging commercial hubs in rural areas, the potential for high returns is drawing interest from across the country. Let’s take a closer look at why Arizona is proving to be a hotspot for commercial real estate investments.

Economic Growth in Arizona

A good yardstick to help determine the state of any economy is the employment figures. According to a report published by the University of Arizona, there was strong job growth and a record-low unemployment rate in the state for the first half of 2024. This is highly indicative of a vibrant economy and although growth is expected to slow slightly, the outlook remains positive.  

The health of the Arizona economy can be attributed to several key factors:

·       Thriving tech sector: Arizona is becoming a hub for technology companies, with the state proving to be a great place to build a digital business.

·       Healthcare expansion: The healthcare sector continues to grow, driven by population increases and the state’s investment in medical infrastructure.

·       Renewable energy growth: Arizona’s natural resources make it a prime location for solar and renewable energy projects, creating jobs and boosting demand for industrial and commercial spaces.

·       Manufacturing resurgence: Advanced manufacturing is another area of growth, with companies setting up operations due to Arizona’s logistical advantages and access to key markets.

A strong economy is always the foundation of a healthy commercial property market. The state’s ongoing economic growth is fueling the interest of property investors in commercial real estate in Arizona.

Business-Friendly Environment

Arizona legislators and lawmakers have worked hard to make Arizona as business-friendly as possible. The pro-business policies that the state introduced have helped to fuel the surge in property investing.

Key factors that have made Arizona so attractive to businesses and investors include:

·       Competitive tax incentives: The state offers a variety of tax credits, incentives, and exemptions designed to support new businesses and attract out-of-state companies.

·       Streamlined regulations: Arizona’s relatively straightforward regulatory process allows businesses to get off the ground more quickly compared to other states.

·       Proactive economic development: The state government actively works with industries to identify growth opportunities, providing grants and resources to support commercial expansion.

These factors combine to create a business-friendly climate that continues to attract property investors.

Rising Population and Workforce

A rising population is another key factor driving Arizona’s thriving commercial property market. The figures from the 2024 census show that Arizona has a population just shy of 7.5 million. By comparison, the figure for 2010 was about the 6.3 million mark. According to NCHstats, the data show that Arizona has consistently been one of the fastest-growing regions in the U.S.

A growing and sustainable population is a critical part of a healthy economy, and in turn, a vibrant commercial real estate sector.

Here are a few of the key ways that a rising population is driving commercial property interest:

·       Increased urbanization: As more people move into urban areas, the need for office spaces, retail locations, and mixed-use developments has surged.

·       Skilled workforce availability: Arizona’s growing population includes a rising number of skilled workers, making the state attractive for companies looking to expand.

·       Infrastructure improvements: Investments in roads, public transit, and utilities are helping businesses access key markets and making the state a more attractive place to live and work.

·       Affordable housing: The relative affordability of housing in Arizona, compared to neighboring states, is encouraging more people to relocate, further fueling demand for commercial spaces.

This population and workforce growth make Arizona a promising location for long-term commercial investments.

Diverse Investment Opportunities

Arizona’s commercial real estate market offers a wide array of investment opportunities, catering to both local and national investors. Whether it’s office space, industrial units, or retail outlets, investors are certainly not short of options when looking to capitalize on commercial property in Arizona.

Among the key points helping the market thrive are:

·       Variety of sectors: From tech hubs to healthcare facilities, Arizona’s diverse economy supports different types of expansive workplaces.

·       Growth in e-commerce and logistics: With the rise of e-commerce, industrial and warehouse spaces have become increasingly valuable, especially near major transportation routes.

·       Retail recovery: Retail spaces in growing urban areas are seeing renewed interest, as businesses capitalize on the state’s expanding population.

·       Long-term potential: Arizona’s continued economic and population growth suggests strong long-term returns for commercial property investments.

With such a wide range of opportunities, investors can diversify their portfolios and take advantage of Arizona’s promising commercial real estate market.

The Future Looks Bright for Arizona Property Investors

Investing in commercial real estate can be lucrative, but the conditions have to be right. Arizona is a state where all the right boxes for successful commercial real estate investing have been ticked. A combination of economic growth, a rising population, and a business-friendly environment has solidified its position as a hotspot for commercial real estate.

With diverse opportunities and the potential for long-term returns, property investors are increasingly turning to the Grand Canyon State to expand their portfolio.