Spotlight: Arizona
arizona’s Economy historically has rEliEd on thE statE’s 300 days of sunshinE
Each yEar to attract tourists and vacation-homE-ownErs. now, thE statE is Bank-
ing on thE sun to hElp warm up thE Economy via anothEr routE: solar EnErgy.
The state’s Renewable Energy Tax Incentive strives to bring renewable- and solar-energy companies — and
jobs — to Arizona. As a result of the initiative, solar-energy developments are taking place statewide.
An industrial property in Phoenix, for example, will soon have the state’s largest commercial rooftop
solar-power system. Nearby city Goodyear saw its second large solar-related lease this past April to a
solar-dish manufacturer.
Phoenix also recently announced that it will build a $1 billion solar-power plant at its only active land-fill site; the plant is expected to be operational by the end of 2012. Another solar-power facility also is
planned near Flagstaff. And Tucson, which has been installing solar panels on its buildings for the past
decade, is one of 25 U.S. Department of Energy Solar America Cities nationwide.
Arizona’s goal of becoming the “Solar State” could indeed benefit its economy if these efforts materialize: A recent Northern Arizona University Landward Institute report found that the state could gain
4,000 permanent jobs and more than 50,000 construction jobs if nationwide policies encouraging
clean-energy development and climate-change mitigation are implemented.
Phoenix Multifamily
PHOENIx MULTIFAMILy VACANCy RATES
Colliers International called the Arizona capital “the poster child for
overbuilding and speculation” during
the housing and construction boom.
Indeed, the housing-market downturn has had affected Phoenix’s multifamily apartment market adversely.
Vacancy rates among all apartment
classes are up, with a shadow inventory of foreclosed-upon, now-rented
houses affecting apartments’ performance. According to Marcus &
Millichap, however, a 58-percent decline in apartment completions in Phoenix from the first quarter of
2009 to the first quarter of this year may help offset this market pressure.
Source: Marcus & Millichap
Small Business Focus: Construction
Small businesses — i.e., those with fewer than 500 employees — account for 97.4 percent of Arizona’s
employers and almost 48. 8 percent of its private employment, according to the U.S. Census Bureau.
In 2006, amid the building boom, the construction industry was the state’s largest small-business
employer, according to the U.S. Small Business Administration (SBA). But according to the Bureau of
Labor Statistics, construction employment in the state decreased 25 percent from January ’09 to this
past January — and more than 53 percent from its April ’06 peak.
Still, small businesses remain a bright spot for brokers. SBA lending in the state increased by 65 percent from the first quarter of ’09 to the first quarter of this year, thanks in part to the American Recovery
and Reinvestment Act of 2009.
top in-state small-business lenders: Wells Fargo Bank, JPMorgan Chase Bank, BBVA Compass Bank
Unemployment
UNEMPLOyMENT RATES
According to the Congressional
Oversight Panel, Arizona had the
fourth-fastest-growing job market
in the country between ’00 and ’08.
Its unemployment rate has doubled
since the housing boom’s ’07 peak,
however, and reached 9. 6 percent
this past March.
Arizona’s and most of its metropolitan statistical areas’ (MSAs’) unemployment rates have generally
hovered near the national rate in the
past year. One metro area has been an anomaly, however — the Yuma MSA’s unemployment rate was
triple the state’s rate in March.
Sources: Arizona Department of Commerce, U.S. Department of Labor
Ivanna C. Sukkar is senior associate editor at Scotsman Guide. Reach her at (800) 297-6061 or ivannas@scotsmanguide.com.
3 Cities to Watch
TUCSON
In addition to being a statewide and national leader
in solar energy, this southern Arizona city is expected
to lead the way in the health-care sector. A recent University of Arizona analysis predicts Tucson’s health-services industry will add 3,900 new jobs in the
coming year.
YUMA
Photo: Ken Lund
This border town’s unemployment rate was 28. 8 per-
cent this past March, tripling the state’s rate. At least
two companies may close their doors this summer,
according to the Yuma Sun. But the Greater Yuma Eco-
nomic Development Corp. says that as of this past
April, 14 qualified companies are considering moving to
the area.
SCOT TSDALE
Photo: drbertdelgado
A tourist and convention destination, this Maricopa
County city faces a $2 million loss in bed-tax revenue,
according to The Arizona Republic. This past March,
Scottsdale residents voted on a bed-tax increase, tak-
ing effect in July, that could help market the Scottsdale
Convention and Visitors Bureau.
wHAT;THE;LOCALS;SAY
“Phoenix was hit with a one-two punch in the
apartment world. With the residential market’s
foreclosures and the issue of shadow stock, it was
brutal — vacancies shot up in [class] A, B and
C properties.”
—;NICK;MINER,;ASSOCIATE;BROKER,
EAGLE;COMMERCIAL;REALT Y;SERVICES
sources: Arizona Daily Star, Arizona Department of Commerce,
The Arizona Republic, Brighter Energy.org, Colliers International,
Congressional Oversight Panel, Globe St.com, Greater Phoenix Economic
Council, Greater Yuma Economic Development Corp., Inside Tucson
Business, Marcus & Millichap, Phoenix Business Journal, Real Estate
Center at Texas A&M University, Trepp LLC, U. S. Census Bureau, U. S.
Department of Energy, U. S. Department of Labor, U. S. Small Business
Administration, Yuma Sun
