Southern California’s wildfires have been headline news for the past few weeks, representing billions of damage to property and livelihoods for our neighbors to the west. The full impact will take months to assess and years to address: sorting through insurance issues and the reconstruction of homes, neighborhoods, and businesses. With the obvious strain on the California economy, it stands to reason that Arizona is positioned to be one of the safety valves to assist displaced Golden State residents. In a recent article, AZ Central noted that “requests from Los Angeles-area residents looking for Valley rentals have already jumped,” and that high costs and long rebuilding timelines could make Greater Phoenix an appealing option.
Californians have been migrating in a net positive direction to Arizona for years. At a rate of more than 170 people per day, the past decade has seen about 630,000 Californians relocate to Arizona—and along with them, numerous headquarters relocations and company expansions. The last time we saw a significant outside influence on the migration patterns was during the Covid-19 pandemic, when people suddenly had a lot more flexibility with when and where they could work. Again, it’s too early to know the full impact, but the relative excess inventory in the Greater Phoenix multifamily sector could end up being mutually beneficial for Californians needing an alternative.
Beyond the immediate California factor, the start of 2025 marks a time of maturation in the Greater Phoenix economy. Increasing numbers of companies are interested in relocating to the Valley, particularly in technology—paying off on the long-term strategy of developing the Silicon Desert. Taiwan Semiconductor and Amkor alone represent billions in economic impact. In addition, notable relocations of headquarters last year to Phoenix included Comtech (a satellite telecom company from New York) and USAA Federal Savings Bank (formerly based in San Antonio).
Such moves and investments most visibly impact the industrial side of CRE and job creation, but they also echo within the ecosystem of suppliers, housing, and support infrastructure from grocery stores to entertainment complexes. With new facilities and large employers flowing into the market, we are seeing an uptick in owner-operator interest, as well as additional tenant interest. That type of symbiotic expansion bodes well for the economic growth within our community and the health of the overall Phoenix CRE sector.
You can read all the details about the commercial real estate industry in the R.O.I. Properties “Real State – Commercial” newsletter, with additional statistics, market trends and information.
