The Business Journal of Phoenix – By Jan Buchholz
The Urban Land Institute released its annual trends forecast this week, with Phoenix rated No. 9 among major U.S. metropolitan areas for real estate investment and development opportunities.
The report, “Emerging Trends in Real Estate 2008,” is a mixed bag.
On one hand, the report states: “People and businesses gravitate from lofty California cost structures to the more affordable desert oasis. The area captures back-office operations from L.A. and Orange County businesses and overflow from bursting-out Inland Empire distribution centers.”
But then it suggests problems may be brewing: “The city is still one stop away from global pathways, and poorly planned sprawl development spells future trouble. The area needs revamped infrastructure to keep pace with all the growth, including more roads and improved sewage treatment and water systems.”
It also questions whether the completion of light rail lines next year will be a boon to the urban environment as it has been in Denver, given that Phoenix “has no defined commercial core.”
Phoenix is experiencing a “softening” of the office and apartment markets as a result of the housing glut and a slackening in migration.
The report gives its top ratings to Seattle, New York and Washington. Those metro areas are followed by Los Angeles, San Francisco, Boston, San Diego and Denver. Rounding out the list after Phoenix are Houston, Miami, Chicago, Atlanta, Dallas/Fort Worth and Philadelphia.
The report was released in advance of this week’s ULI fall meeting, to be held this year in Las Vegas. The three-day program is expected to draw about 7,000 attendees from around the world.
Arizona, in particular, will be trying to elevate its position in the eyes of national and international investors and developers. The Arizona chapter of ULI has reserved one of the largest spaces in the exhibition area, naming it the Arizona Pavilion. About 25 public and private organizations have ponied up an average of $6,000 each for a presence in the 3,000-square-foot display area, which will tout Arizona as a sound choice for real estate investment.
SunCor Development is one of the participants in the pavilion. President and CEO Steve Betts, also a member of ULI Arizona’s board, said his company hopes to benefit from the added exposure.
