Above: COVID-19 is accelerating suburban growth in places like Sterling Grove, a 780-acre master-planned neighborhood, west of Loop 303 in Surprise, that offers homeowners access to a private country club and 18-hole Jack Nicklaus-designed golf course.
The Phoenix metro area performed extremely well for new construction during the past decade, outperforming much bigger urban hotspots, according to recent StorageCafe research. The article analyzed the real estate development in the country’s top 50 biggest metros over the past 10 years in both residential and commercial sectors.
Although the decade started slowly for new construction, following the setbacks of the previous recession, its second half saw a major surge in real estate development – a trend that also occurred in Phoenix-Mesa-Chandler metro area.
The Phoenix metro area trumps LA and Chicago for new construction
Phoenix is one of the biggest success stories of the decade in terms of real estate development. Although it has a decidedly smaller population than most of the top 10 metros, Phoenix manages to rank fourth for new construction, following the Dallas, Houston, and New York metros. A sustained influx of new residents, as well as a dynamic local economy that keeps adding new jobs, are stimulating residential and commercial development.
Over 207,000 building permits for single family homes and another 95,000 for multifamily units were issued in the metro area from 2012 to 2021. To compare, the Los Angeles metro area – which incidentally is also where many of Phoenix’s new residents originate – permitted only 89,000 single family homes during the same timeframe. The best years for single family construction in Phoenix were 2020 and 2021, with 31,000 and 35,000 new homes being permitted, respectively. The same trend verifies this in most of the metros analyzed, proving that the Covid-19 pandemic did not hamper residential construction activity. Multifamily construction also saw a massive surge in 2020 and 2021 – almost 17,000 multifamily units were permitted in 2021, compared with only 4,000 units in 2012.
The self storage sector usually goes hand in hand with residential construction and population growth, so it’s hardly surprising that self storage in Phoenix showed remarkable progress over the past 10 years. Almost 12 million square feet of new space were added to the local inventory from 2012 to 2021, with 2019 and 2020 being the best years of the decade for self storage construction.
Phoenix builds over 97 million square feet of new industrial space, more than the New York metro area
Industrial construction also gained huge momentum in the Phoenix metro area over the past decade – over 97 million square feet of new industrial space was added, which is 17 million square feet more than the New York metro area managed to build during the same period. The most productive years of the decade for industrial construction were 2019 through 2021. The future looks even better for the industrial sector in the area, with Taiwan Semiconductor Manufacturing having just broken ground on a new, $12-billion computer chip factory that will be launched in 2024.
With Phoenix often being hailed as the next Silicon Valley, it’s only natural that office construction fared well over the past decade. More than 21 million square feet of office space were built during that period, and 2020 was the most active of the decade, with an impressive 4.6 million square feet of new space.
The country’s biggest 50 metros saw impressive real estate development during the past decade
The 2012-2021 decade ended up on a high note in terms of real estate development in the country’s top 50 biggest metros. In 2021 alone, about 557,000 single family building permits for single family homes and 437,000 multifamily units were issued in these metros collectively, the most in the entire decade. Over the ten years analyzed, more than 4 million single family units and 2.3 million multifamily units were permitted – and it’s worth noting that construction activity in these 50 metro areas accounts for 59% of the single-family sector and 75% in the multifamily sector.
The industrial sector in the 50 metros overall registered the addition of a whopping 2.2 billion square feet of new space, followed by the office sector with 740 million square feet and by the self storage sector, with 300 million square feet of new storage space.
Article originally posted on AZ Big Media on February 22, 2022