We especially like the state’s high spots in surveys that matter to commercial real estate site selectors.

We admit it. Here at Commercial Real Estate Group of Tucson, we keep track of the state rankings that tell us where Arizona is on the “business-friendly” scale.

They’re important measures at least because corporate site selectors pay attention to them. If a state isn’t doing well, it’s not on the radar of the decision-makers for locating or expanding into an area.

To that end, Arizona’s rankings on most measures are causing commercial property selectors to take a look at what we have to offer.

The two we like best directly speak to corporate real estate selectors. Both Site Selection magazine’s Top State Business Climate Rankings and the Pollina Corporate Top 10 Pro-Business States focus on issues important to corporate site selectors, including workforce, taxes, regulations and incentives.

Site Selection put Arizona 15th in its 2015 rankings, while Pollina pegged the Grand Canyon State at 17th in its 2015 report. Those are slightly higher than the previous year’s positions (17th and 19th, respectively).

In even better news, the survey of site selection executives and consultants deemed Arizona as the state with the 12th best business climate. And Pollina predicts that if Arizona can make a few adjustments, it could break into the top 10 pro-business list later this year.

This is heartening news. We are slowly but surely clawing our way up the rankings. These surveys are showing that Arizona is an emerging success story in welcoming businesses to locate or expand industrial space, office space and retail space here.

Here’s a quick round-up of recent rankings and some explanations as to why Arizona is getting some buzz:

Site Selection Magazine

In addition to the executive survey, the magazine takes a look at a state’s competitiveness, new facility activities and state tax burdens on business.

Arizona has made several business-friendly moves worth noting by the publication in its 2016 “State of the States” edition. Efforts to increase education funding are underway. A new law prohibits state agencies from passing rules that increase existing regulation on businesses.

Vigorous new-plant activity propelled the state to rank 15th in that category through 2015 Q3. That activity includes a new Northern Trust office building in Chandler, a HomeGoods Inc. distribution warehouse in Tucson and a new data center in Phoenix.

Apple Inc. has committed to investing up to $2 billion in a global command center in Mesa, the magazine says.

Pollina Report

The Pollina report measures 21 factors, including labor, taxes, education, business costs and economic development efforts.

In its 2015 report card, Arizona earned a solid “B.” Here’s how the report broke down:

“A” Grade

•       right to work
•       unemployment insurance
•       business inventory tax
•       property tax.

“B” Grade

•       workers compensation
•       individual tax index
•       regulatory environment
•       transportation infrastructure
•       cost of electricity
•       long-term budget planning
•       economic marketing and response.

“C” Grade

•       college completion
•       average teachers compensation
•       corporate tax index
•       litigation environment.

“D” Grade

•       high school completion
•       funding per college student
•       economic development incentives.

“F” Grade

•       unemployment rate
•       crime rate.

CNBC

The business network’s America’s Top States for Business 2015 put Arizona at no. 34, reflecting the state’s continuing challenges with improving education (ranked 49th), the cost of doing business (40th) and a slow economic recovery (36th).

But the scorecard gave Arizona high marks for Infrastructure (9th), business friendliness (13th) and workforce (14th).

Forbes

Arizona hit the 23rd spot in the Forbes business magazine’s 2015 Best States for Business, which is weighted heavily on business costs.

But the real story is in the state’s future. “Arizona’s outlook is strong,” according to the magazine. “The Grand Canyon State’s job and economic growth forecasts over the next five years are among the best in the U.S.”

The comments are in response to Arizona’s significant 7th ranking in growth prospects. The state landed 15th in labor supply and 20th in regulatory environment.

Its lowest ranking was in quality of life (40th). That category included metrics on cost of living, crime rates, weather temperatures, top-ranked colleges, culture and recreation.

Our Outlook

We see Arizona improving its rankings on several fronts.

After a political stalemate for several years, Arizona is poised to increase funding to K-12 education while providing opportunities to lower taxes.

It already is lowering its corporate income tax rate in steps until 2018. That incremental reduction already moved Arizona up in the rankings of the Tax Foundation’s 2016 State Business Tax Climate Index.

To us, better rankings aren’t merely interesting horse races to watch. We regularly use them to understand how we can best work on the commercial real estate needs of corporate site selectors, real estate consultants, corporate users and business owners to find the Tucson industrial space, Tucson retail space and Tucson office space they need.

Commercial Real Estate Group of Tucson specializes in representing tenants and corporate users across the United States. For more information call +1-520-299-3400.