During the economic and housing crisis beginning in 2007, Arizona was one of the hardest hit states in the nation. The state had experienced some of the most rapid growth, much of which was due to real estate, construction and a robust tourism industry. Unfortunately, as the recession hit, those were the sectors which were hit hardest, and with little economic diversification, the impact was severe.

Fast forward to 2022, and the economic landscape looks markedly different. Yes, construction, real estate and tourism are still important parts of Arizona’s economy, but aerospace, electronic/semi-conductor manufacturing, health care and financial services have all become major employment sectors. Forbes recently named Arizona “Semiconductor Central”, and governor Ducey recently announced a $100M investment by the state in the region’s semiconductor sector.

Among the largest announcements of new growth over the past several years are Intel’s development of two new fabs at its Chandler Ocotillo campus, Taiwan Semiconductor Manufacturing Company’s (TSMC) announcement of its north Valley campus, the major facility expansion of Northrop Grumman, Lucid Motors in central Arizona and several more. The Phoenix area has also become a major warehousing and industrial hub due to its centralized location within the southwest, with 33 million people located within a day’s drive of the area.

While national economic factors will always have an impact on all markets, the condition and trajectory of commercial real estate and business can still be very local in nature, and Arizona is a prime example of this. While there has been some slowing of new development projects, commercial real estate sales and leasing continues to be very brisk in the region compared to elsewhere in the country.

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