The metro’s tech employment base has grown 90 percent in five years

TUCSON – Tucson was ranked #1 on CBRE’s list of up-and-coming tech talent markets in the firm’s annual Scoring Tech Talent Report, which ranks 50 U.S. and Canadian markets according to their ability to attract and grow tech talent.

The new report found that the 10 fastest-growing markets overall increased their tech labor pools by between 33% and 54% over the past five years. Tucson’s tech workforce grew 90 percent over the last five years to 15,700 tech workers—the highest five-year job growth of all 50 small, large and up-and-coming markets included in the report. Additionally, Tucson surpassed all other markets for five-year annual tech wage growth, which has grown 29 percent to $90,528.

The top 10 up-and-coming markets and their associated tech talent job growth rates over the last five years were:

“Tucson has many ingredients to justify itself as the top up-and-coming tech talent market,” said Matt Siegel, Managing Director of CBRE in Tucson. “There are many initiatives by the University of Arizona and private sector development that has created a tech ecosystem that should continue to thrive. Venture development by the University of Arizona coupled with many growing companies in Tucson has attracted talent to Southern Arizona and there have been numerous innovative different companies that have established a presence and been able to capitalize on the resources that Tucson has to offer businesses and families.”

The top five markets for tech talent in 2019 were the San Francisco Bay Area, Seattle, Toronto, Washington, D.C., and New York, all large markets with a tech labor pool of more than 50,000. The Tech Talent Scorecard is determined based on 13 unique metrics, including tech talent supply, growth, concentration, cost, completed tech degrees, industry outlook for job growth, and market outlook for both office and apartment rent cost growth.

View full Tech Talent 2019 Report here . To view individual market statistics and rankings, including rankings on the Scorecard, access CBRE’s Tech Talent Analyzer.

TUCSON, Ariz. – Institutional Property Advisors (IPA), a division of Marcus & Millichap (NYSE: MMI), announced today the sale of Domain 3201, a 289-unit multifamily asset in the Casas Adobes area of suburban Tucson. The property sold for $37.75 million, or $130,623 per unit.

“Situated within the affluent desert landscape of the Casas Adobes region, Domain 3201 gives residents direct access to the rapidly evolving professional and lifestyle amenities of North Tucson,” said Hamid Panahi, IPA first vice president. “Strong local demographics include average household income of $72,500 and the average price of a single-family home is $225,000.” Steve Gebing and Cliff David, IPA senior managing directors and Panahi represented the seller, Aspen Square Management and procured the buyer, Investors Capital Group.

The property has approximately 630 linear feet of frontage along West Ina Road, North Tucson’s main east-west thoroughfare, and is 3.4 miles from Oracle Road. Less than two miles from Domain 3201, the Interstate 10/Ina Road onramp gives residents access to the employers located along the highway, including Raytheon, Caterpillar, and the Davis-Monthan Air Force Base. Two major mixed-use projects, the 51-acre Foothills Mall redevelopment and the 21-acre Shops at Cortaro development are two and five miles away, respectively. Constructed on more than 12 acres between 1985 and 1990, Domain 3201 has three resort-style swimming pools, spas, poolside cabanas, picnic areas and a full-size tennis court.

A GlobeSt.com exclusive report by Kelsi Borland

A few years ago, securing construction debt was a challenge in Phoenix, but today, lenders are actively chasing deals. The capital markets appetite illustrates the evolution of the Phoenix market. Scott Meredith of George Smith Partners recently secured a $67.3 million construction loan for the development of a 254-unit 14-story multifamily property in Phoenix. The non-bank lender deal is a great example of the capital activity in the market.

“The market is diverse,” Meredith, an SVP at George Smith Partners, tells GlobeSt.com. “It is not just big money center banks or life companies looking for class-A deals in gateway cities. It isn’t that confined. It is a more varied appetite from the capital markets with everything from high net worth individuals entering the construction lending space to insurance companies and money center banks and everything in between. The beauty of this capital markets today is that there is capital for a broad range of transactions.”

The ample capital for construction deals is a new trend. During the recession, certainly, lenders were not active in the market. However, just a few years ago, lenders were still skeptical. “At the bottom of the recession, this would not be the case,” says Meredith. “Four years ago, for example, I worked on a ground-up multifamily deal in Phoenix around the corner from this project, and that was a challenge. Phoenix had a reputation as a boom-bust city, and some lenders had been hurt by that. Today, we had much more open minds and those lenders are willing to go back.”

On this most recent deal, the unnamed borrower secured a non-recourse loan at 80% loan to cost through a non-bank lender. “Banks were regarded as inflexible and incapable of providing the sponsor’s desired terms,” says Meredith. “Specifically, banks were unwilling to offer the leverage or non-recourse structure that the sponsor desired.  Furthermore, once the deal closed, the developer wanted a capital partner that acted more like a partner than a highly regulated bank.”

While Phoenix has once been regarded as a secondary market, Meredith says that today, he would call the city an emerging primary market. That evolution has helped attract a diverse pool of lenders to the market. “It is an insulated, diverse economic region, and you see a lot of tech and finance moving there,” he says. ‘The capital markets recognized that diversity now. We see Downtown areas gentrifying everywhere, and Phoenix is part of that trend.”

Looking ahead, Meredith is bullish on Phoenix, and he doesn’t expect the activity to wane anytime soon. “Similar to other emerging primary markets in the West, we see continued demand for the capital needed on new projects coming down the pipeline through the end of 2019 and into 2020,” he says.