Currently, MOB (medical office buildings) and BFR (build for rent) projects are booming in the state of Arizona. The Phoenix metro area in particular is experiencing a revival of its CRE market. Many prominent commercial real estate spaces have undergone massive renovations with many more projects in the works. This transformation has captured the attention of investors both nationally and internationally. Arizona is a hot spot for multiple reasons, including:
- Favorable business environment: Arizona is a very pro-business state, and its competitive corporate tax structure makes it very attractive to CRE investors. In recent years, Arizona has become a distribution hub, with Phoenix ranking no.2 among U.S. cities for distribution and warehousing.
- Population growth: The number of people moving to Arizona continues to grow yearly. On average, 173 people from California move to Arizona daily. This figure is based on the estimated move of 630,000 people between the states over the last decade.
- Geographical positioning: Arizona’s proximity to California, Texas, and Mexico makes the state a key player in regional and international trade.
- Cost advantages: The relatively low cost of land and construction, in comparison to sister states like Texas and California, alongside competitive labor costs allow developers to realize greater profit margins.
The revival is real – what Phoenix landmarks are undergoing major changes?
As previously mentioned, many prominent CRE properties have recently undergone significant renovations that are injecting life into existing spaces. These transformative projects repurpose commercial buildings and give Phoenix metro neighborhoods a real boost.
One such renovation, repurposed a former Sears tire and automotive center, transforming it into a Trevor’s Liquor. In November 2023, Trevor’s Liquor opened its fourth store on the property. The 13,700-square-foot space includes a restaurant, bar, outdoor patio, and golf simulators. The popular retail/restaurant concept is one of the many tenants at the Paradise Valley Mall redevelopment.
Camelback Corridor’s Esplanade campus recently unveiled a $45 million renovation. The upgrades include approximately 30,000 square feet of new amenities with the addition of a new conference center, a lounge for tenants, state-of-the-art fitness center, full-service restaurant, plus lobby enhancements and more. The Esplanade is home to more than 90 tenants, representing some of the Valley’s biggest players in real estate and investment, including Landmark Title’s Arizona corporate office. In addition to new buildings and amenities, a hospitality service provided by Onsite gives tenant access to social connectivity opportunities.
Another well-known property, Metrocenter Mall in Phoenix, is also going through a major renovation and rebrand. Now named The Metropolitan, the project is zoned to become a new urban village. Plans for the site include the construction of 1,000 townhomes, retail space, parks, a civic center and more. While the demolition started in November 2024, construction is expected to take a couple years to complete.
An abundance of opportunities – what sectors are most favorable?
CRE investors looking to make their mark in the state and metro areas will find promising opportunities across many industries. Most notably:
- MOB (Medical Office Buildings)
- BFR/Multifamily housing
- Industrial real estate (for e-commerce and logistics companies)
- Retail
With inflation in Phoenix decreasing below the national average and an employment rate of just above three percent, Arizona’s commercial real estate outlook remains extremely positive. If you are an investor or developer looking for an experienced escrow and title agency who is well-versed in complex transactions, please get in touch here. Landmark Title’s commercial team has a comprehensive understanding of what it takes to successfully navigate the process and diligently anticipate challenges to ensure our clients’ closings are efficient and timely.