A new report from ComercialSearch, a commercial listing platform, finds that Phoenix ranks second nationally for industrial development growth in 2022.
The firm recently sorted industrial property figures from its vast collection of property data to produce state-by-state projected industrial property growth rates.
The report only includes industrial properties larger than 25,000 square feet and includes commercial real estate, office space, retail, multifamily spaces and mixed-use properties.
The report focuses on the pipeline of industrial development and is primarily concerned with those properties listed as “under construction.” The report accounts for new properties within the same campus as other properties by taking into account square footage numbers reflected by newly added space.
According to provisional estimates gathered in the report, around 592.5 million square feet of industrial use space is currently under construction in the United States, and the report projects that 2022 will likely be “the strongest year yet for industrial development.”
According to the report, Phoenix has 36.3 million square feet of industrial space currently under construction.
The report finds that low vacancies and major investments are contributing to the metro area’s role as a regional distribution and manufacturing center.
It is likely that Arizona will see continued growth in industrial development as the state continues to pass legislation that allows cities like Phoenix to be more competitive from a property tax standpoint.
Governor Doug Ducey last month signed into law S.B 1093, legislation sponsored by state Sen. J.D. Mesnard, R-Chandler, to lower the state’s commercial property tax assessment ratio, which tax experts say is necessary to ensure the state’s continued economic competitiveness. Upon full implementation by 2027, the assessment ratio will be 15%.
In the early 2000’s, Gov. Janet Napolitano assembled the Citizens Finance Review Commission to determine how Arizona could diversify its economy and to identify what hindered the state’s ability to attract jobs.
The commission found that uncompetitive commercial property taxes were one of the biggest hurdles to economic growth in Arizona.
The gradual lowering of the commercial property tax assessment ratio over the years has allowed Arizona to be more competitive with other Western states.