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Arizona's economy is not just growing; it's diversifying rapidly 1, ranking 14th on the list of top states for business in the U.S. 2 Witnessing a 40% population growth in the last two decades 3 and benefiting from attractive business tax incentives, a strong fiscal landscape, and a low-cost environment, Arizona opens investment opportunities in businesses and real estate, especially in high-tech industries 4. 2024 could be your golden year for investments in Arizona. Let's explore why Arizona stands out as a top investment destination.
When it comes to low-cost environments for operating or investing in businesses and real estate, the opportunities to invest in Arizona are supported by a strong fiscal landscape and sustained economic stability.
Diversified Growth: A Hub for Business and Innovation
As reported in 2019, Arizona has seen a surge in investments across diverse sectors and has become home to some of America's fastest-growing private companies5. The state's focus on semiconductor manufacturing, technology, healthcare, and clean energy is creating a dynamic and promising economic landscape for investors.
Notable Fortune 500 companies6 like Freeport-McMoRan, UnitedHealth Group, and Bank of America have invested heavily and relocated their headquarters to Arizona. In 2024, significant manufacturing projects from LG Energy Solution and Taiwan Semiconductor Manufacturing Co. (TSMC), who are tripling their investment to $40 billion in Arizona, make it the biggest foreign outlay in the U.S. 7, resulting in an overall investment of $58 billion8 in Arizona, creating a wealth of job opportunities across various industries. Here's a snapshot of the major investments in Arizona:
| Companies | City | Investment |
| Edwards | Chandler | $20 billion |
| LG Energy Solution | Queen Creek | $5.5 billion |
| Amkor Technology Inc. | Peoria | $2 billion |
| Clayco | Phoenix | $2.5 billion |
| Mesa | $600 million | |
| ASM International N.V. | Scottdale | $300 million |
| Applied Materials Inc. | Tempe | $270 million |
| Arizona State University (ASU) | Tempe | $270 Million |
| Fortescue Future Industries | Buckeye | $24 million |
| Rose Acre Farms | Rural Arizona | $100 million |
| Benchmark Electronics | Mesa | $20 million |
| Sysco | Mesa | $102 million |
| JA Solar | Phoenix | $60 million |
| EmD Electronics | Chandler | $39 million |
| Micro/Nano Fabrication Center | Tucson | $35.5 million |
| HyRel Technologies | Peoria | $15 million |
In addition to these top companies, Arizona's economic landscape has been further enriched by significant investments from notable firms. Tucson has attracted Raytheon and Republic Services, while Phoenix has seen investments from Blue Origin, Evie Networks, and TCRT. Additionally, Microstar Logistics in Tucson, Moov Technologies, Foresight Technologies, and Mediterranean Shipping Company in Tempe, CMS Steel in Mesa, Avanti Windows & Doors in El Mirage, Factor and Romac Industries in Goodyear, and Optimal Health Systems in rural Arizona, all contribute to the diverse and growing business environment across the state.
Economic Forecast and Job Market
Arizona's economic allure is only growing stronger. The arrival of major factories and businesses is fueling growth in smaller enterprises and the job market, positively impacting housing and retail sectors. With strategic investments, Arizona's economy is set to thrive.
- Job Growth: In 2023, Arizona ranked among the top three for job growth9, adding 60,000 new jobs, mostly in the private sector10, and surpassing the national averages with a low unemployment rate of 3.4% in April 2023, the lowest since 197611. Key sectors like healthcare, technology, and tourism contributed over 20,000 new jobs. 2024 is expected to see the addition of another 25,000 jobs.
- Interest Rates: The anticipated cut in interest rates12 in early 2024 is expected to further boost the economy. Despite recession concerns, Arizona's robust job market and growth trends position it for continued success.
- Office and Industrial Growth: The Greater Phoenix area has seen remarkable industrial growth, outpacing the office market and ranking high in this sector nationally. Arizona Capital, Phoenix, will see market growth - industrial and multifamily, including single-family for rent product, are driving the activity in the market right now both from a tenant demand standpoint and a capital investment standpoint13.
Rental and Housing Market Prediction for 2024
Arizona's housing market is on the brink of an exciting year. With a rising number of home listings and mortgage applications, buyer activity is surging. The state, with 900,000 renter households, is expected to see a 5.8% increase in median home values in the Phoenix-Mesa area from May 2023 to May 202414.
Median sale price across Arizona (Jan-Sept 2023)
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- Median Sale Price: The median home sale price in Arizona was $434,700 as of September 2023, a 4.6% year-over-year increase. Cities like Phoenix and Flagstaff are leading this growth14.
- Demand & Supply: Balanced demand and supply rates in cities like Phoenix are a promising sign for the 2024 market.
Arizona's thriving economy and dynamic real estate sector present a unique opportunity for investors. The time to dive into Arizona's market is now. At Waahe Capital, we specialize in multi-family real estate investments and are poised to help you capitalize on the latest opportunities in Arizona. Contact us to discover more about our investment opportunities.
Learn more about why to invest in Arizona multi-family real-estate? Let's talk!
2. Top States for Business: Arizona, CNBC (July 11, 2023), https://www.cnbc.com/2023/07/11/top-states-for-business-arizona.html.
3. Censusscope, Population Growth Rankings, https://www.censusscope.org/us/rank_popl_growth.html.
4. Where to Invest in Arizona: US Manufacturing Tech, Investment Monitor, https://www.investmentmonitor.ai/features/where-to-invest-in-arizona-us-manufacturing-tech/?cf-view.
5. Two AZ Companies Make Inc. Magazine List, Your Valley, https://www.yourvalley.net/stories/two-az-companies-make-inc-magazine-list,417407.
6. Fortune 500 in Arizona: These 10 Companies Are the Largest by Revenue in State, AZ Central, https://www.azcentral.com/story/money/business/2023/06/17/fortune-500-in-arizona-these-10-companies-are-largest-by-revenue-in-state/70331040007/.
7. Russell Flannery, TSMC Will Triple Arizona Investment to $40 Billion, Among Largest Foreign Outlays in U.S. History, Forbes (Dec. 6, 2022), https://www.forbes.com/sites/russellflannery/2022/12/06/tsmc-will-triple-arizona-investment-to-40-billion-among-largest-foreign-outlays-in-us-history/?sh=46ee491f1ec8.
8. Arizona's $58 Billion in Manufacturing Investments Among Most in Nation, Cronkite News, https://cronkitenews.azpbs.org/2023/03/31/arizonas-58-billion-in-manufacturing-investments-among-most-in-nation/.
9. 2023 in Review: The Future is Arizona, Arizona Commerce Authority, https://www.azcommerce.com/news-events/news/2023/12/2023-in-review-the-future-is-arizona/.
10. Arizona Adds 60,000 Jobs Year-Over-Year in November, Mostly in Private Sector, Kelli Ward, https://kelliward.com/articles/arizona-adds-60000-jobs-year-over-year-in-november-mostly-in-private-sector.
11. Arizona Jobs Back on Track in April, Arizona's Economy, https://www.azeconomy.org/2023/05/economy/arizona-jobs-back-on-track-in-april/.
12. Bill Conerly, Fed Will Be Slow to Cut Interest Rates in 2024, Forbes (Jan. 14, 2024), https://www.forbes.com/sites/billconerly/2024/01/14/fed-will-be-slow-to-cut-interest-rates-in-2024/?sh=3456f6606c47.
13. CRE: What’s the Big Picture, In Business Phoenix, https://inbusinessphx.com/commercial-real-estate/cre-whats-the-big-picture.
14. Arizona Real Estate Market, Houzeo, https://www.houzeo.com/blog/arizona-real-estate-market.
