Phoenix Among Top Tech Markets
The city is ranked fourth in the nation for the top tech office leases with a total of 1.3 million square feet in transactions.
“Tech companies are attracted to Phoenix for many of the same reasons that have prompted many firms across all sectors to open operations and/or expand their presence within the Valley,” Kevin Calihan, EVP at CBRE, tells GlobeSt.com. “Companies of all sorts are attracted to Phoenix’s growing, affordable, and increasingly educated work force, favorable business environment and high quality of life.”
This is a notable ranking for the secondary market, which has seen a recent surge in population and job growth. The top three markets on the list are all major tech hubs and more mature office markets. “Phoenix claiming five of the top 100 tech leases in the U.S. foreshadows continued healthy growth throughout metro Phoenix,” says Calihan. “Four out of the five leases were by companies growing their footprints significantly in Arizona. As companies become familiar with the market and its labor and choose to grow their businesses here, Phoenix will become less reliant on new-to-market companies.”
Landlords near labor centers are benefitting from the demand. “Landlords can continue to attract tech companies by being geographically close to the metro’s labor pool, by providing amenities—both within a project and in proximity—that attract and retain employees, and by building out modern, quality office buildings that offer businesses/tenants to grow,” Charlie von Arentschildt, a senior associate at CBRE, tells GlobeSt.com.
Tech companies will likely continue to expand in Phoenix this year. “We anticipate that tech companies will continue to relocate and expand within metro Phoenix,” says von Arentschildt. “Many tech companies have only recently opened their first offices in the market, so we expect some of them to follow in DoorDash and Carvana’s footsteps in the coming years by expanding to further capitalize on the great attributes the metro has to offer. We anticipate that activity from both new-to-market companies and existing companies in the Valley will continue to be strong.”