Raytheon is adding 2,000 jobs to the booming local economy. Pictured is William H. Swanson, left, chairman and CEO of Raytheon Co., and Taylor Lawrence, right, Raytheon vice president, give Deputy Defense Secretary Ashton B. Carter, center foreground, a tour of the company’s facilities by in Tucson, Ariz., Sept. 26, 2012. Photo courtesy of the U.S. Department of Defense.
Look Who’s Moving to Tucson!
6,500+ jobs, 8 major companies coming to our growing metropolis
By: Ben Riehle, CEO/Co-Founder Apex Real Estate Network
The secret is out, Tucson is growing and growing fast. Just about everywhere you look there are new developments breaking ground and new announcements of companies moving to Tucson. Recently, I wrote an article that primarily focused on the large residential developments taking place in the Old Pueblo. I posed the question, is Phoenix’s sleepy little sister city finally waking up? [See Article.]
It appears the answer is a resounding, YES! This article will explore some of the companies responsible for Tucson’s growth and the anticipated economic impact these companies will have on our local economy. Additionally, I will explore the effects these announcements will have on the local real estate market.
I recently sat down for lunch with Edwin Harper of RMH Investment Management, LLC. – a local Tucson investment manager. Edwin shared research his team completed on the Tucson economy. While Caterpillar, Raytheon, and Amazon have garnered much attention as they start or expand operations in Tucson, less attention has been given to companies like Vector Space Systems, Home Goods, Hexagon Mining, Comcast and Ernst & Young which collectively will bring 2,500 jobs and over $1.5 billion of economic impact to the local economy.
Over half of the 6,500 the jobs identified in the table above will have average salaries over $70,000. Raytheon, for example, is anticipating an average salary of $110,000 for their 2,000 new positions. [See Article] Vector Space Systems anticipates average $70,000 salaries for their 200 positions.[See Article]
Another beneficial effect of the growth is the amount of development currently planned. Amazon is building a 2.3 million (yes, 2.3 million) square foot distribution center.[See Article] Home Goods, a national home furnishing retailer, is set to build an 800,000 square foot distribution center. The required supporting businesses needed for this scale of development will likely create additional, trickledown jobs and growth in the local economy.
The last two years have been fantastic for the Tucson economy and the current economic climate shows no signs of slowing. With new announcement from major corporate players occurring almost monthly, I anticipate this growth to continue at least through 2019. With a general context and understanding of the Tucson growth and economic environment, lets shift focus from larger economic trends and analyze their likely effects on the Tucson housing market.
Tucson’s urban sprawl covers a vast 230 square miles. Until as recently as the last two years there was little demand in being centrally located and living near Tucson’s CBD was viewed negatively. This has changed dramatically. Today, being close to the trendy nightlife and popular restaurants located in the heart of Downtown Tucson is a huge draw. As result, home prices in nearby neighborhoods have appreciated dramatically. With Hexagon, Ernst & Young, Caterpillar, and others locating their offices in downtown Tucson, it seems likely that demand for central housing will become even greater. Although it’s early, I expect housing demand near the new Amazon warehouse and Raytheon building to should similarly increase.
I have lived in Tucson for over a decade. Over that time, I have seen the city come alive and grow faster than nearly anyone could have predicted. Downtown nightlife has greatly improved. Employment opportunities are increasing by the day. It seems the rest of the country has realized Tucson has a lot to offer. As we move into the second half of 2018 it appears the economic growth will continue to fuel the already flourishing real estate market – especially in select locations. The main question I ask is how long this growth can continue?
My opinion: there is still room for growth and real estate investors with local knowledge can capitalize on it.
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