Tucson recently got good news in the midst of the COVID-19 disruption. Moody’s Analytics put it in its top 10 metro areas that are in the best position to quickly recover from the coronavirus-caused economic disaster.
“The most dynamic recoveries may well … take place … in areas that either were or were poised to lead the way in 2020 before everything changed,” writes Adam Kamins, senior regional economist at Moody’s, in the report “The Next Recovery: A Regional Perspective.”
The report took a look at three metrics:
- population density
- share of jobs that require college degrees
- percentage of residents with college degrees.
The May 2020 report argues that people will want to reside in places with good job prospects and low-density living that could reduce the spread of COVID-19 and new communicable diseases.
This migration will be particularly attractive to young millennials and future Gen Z workers who will remember the spread of SARS-CoV-2 in high-density cities, according to the report. Businesses will follow those workers, pumping up a metro area’s economy.
Great Recession Recovery
Here at Commercial Real Estate Group of Tucson, I believe that Tucson has the right economic development strategies in place to quickly recover. The area and the state learned big lessons from the last economic disaster, the Great Recession of 2008-2009. We were slow to bounce back from job loss, mainly because there were few strategic efforts to attract business.
Today, the Arizona Commerce Authority and Tucson organizations like Sun Corridor Inc. have worked hard to help establish business incentives, workforce development programs and a focused recruitment of companies with quality jobs.
The Tucson metro area has several major companies needing many talented employees, including Raytheon Missiles & Defense headquarters, Caterpillar’s Surface Mining & Technology Division headquarters, Roche Tissue Diagnostics and Amazon. Support businesses have followed, attracted to available Tucson commercial property.
Pima Community College and the University of Arizona provide top training and education in a wide variety of high-tech industries, churning out workers from technicians to researchers to business strategists. Arizona provides grants to companies that hire and train new employees.
Support for startups is strong. Tech Launch Arizona helps UA researchers and faculty bring discoveries and inventions to market. Startup Tucson and the UA Center for Innovation provide entrepreneurial support. Tucson-based Optics Valley—a part of the Arizona Technology Council—works to attract optics and photonics companies. Local venture capital funds provide financial support and business development to emerging firms.
Future Tucson Commercial Property
There is room to build and support companies that open in the Tucson metro area. Business centers have been established or are planned to meet the needs of new and relocating companies. They include Pima County’s Aerospace Research Campus, the Sonoran Corridor and the Southeast Employment and Logistics Center; UA Tech Parks at two locations; the Sahuarita Advanced Manufacturing and Technology Center, and Oro Valley’s Innovation Park.
The inland Port of Tucson and the Tucson International Airport have Tucson commercial property ready for development, especially for transportation and distribution firms. Established opportunity zones provide money-saving federal tax incentives for commercial development. Investors bullish on Tucson are developing spec manufacturing space, hotels and apartments.
Top Performing City for Jobs
Tucson’s thriving economy before coronavirus compared favorably among 200 large U.S. metropolitan areas. Tucson metro was ranked 77th in the Milken Institute report “Best Performing Cities 2020: Where America’s Jobs are Created and Sustained.”
It’s an astonishing turn-around, considering that Tucson was ranked 175th—five positions from the bottom—just five years earlier. In this year’s report, the metro area ranked 28th in one-year job growth. It’s in the top 50 for nearly all measures, including growth in high-tech GDP and high-tech location quotient, which indicates higher concentrations of industries compared to the U.S. average.
Strong Inbound Migration
Inbound migration to Arizona already is strong. A 2019 American Enterprise Institute report showed that among all 50 states, the Grand Canyon State had the highest percentage of newcomers compared to people leaving. A Census Bureau study showed that Arizona is the second most-popular destination for residents leaving California.
Especially in Tucson, new residents are drawn to our outdoor recreational activities, rich arts and entertainment scenes and affordable housing from apartments to single-family homes on large lots. Businesses from many states will find operational cost savings of their own.
I expect that it will take several years for the U.S. economy as a whole to recover from COVID-19. But Tucson is indeed well positioned to ramp up and continue its robust march to better business vitality.
Talk with me about how your future business plans can include locating on Tucson commercial property. Contact me for a complementary consultation.