Thank you Chris Pettiet for the invite this morning to the Arizona Biltmore for Columbia Bank’s 2026 Economic Outlook, with Christine Mackay of the Greater Phoenix Economic Council (GPEC) running through the numbers. If you sell, lease, or invest in Arizona real estate, this is the kind of presentation where you fill up a legal pad fast. Here’s what stood out — and why it matters for anyone underwriting a deal in this market right now.
The Numbers Behind the Hype
GPEC covers 22 cities and towns across Maricopa and Pinal counties — 14,000 square miles that together represent 78.4% of the state’s entire economy. Over the past 36 years, GPEC has helped recruit more than 1,120 jobs and 200,000+ employees to the region. That’s not a marketing stat — that’s decades of compounding.
A few more data points worth sitting with:
- Arizona’s GDP hit $446 billion in 2024, growing 4.5% year over year
- Greater Phoenix’s population is projected to grow from 5.2 million today to 6.1 million by 2034
- The Southeast and West Valleys will capture the majority of that growth — Pinal County alone is projected at 36.6% growth, with the West Valley at 30.4%
- We currently have a 2.7 million person workforce, and 27% of active prospects looking at the market are international companies
Mackay’s line stuck with me: Phoenix is the “Belle of the Ball for Asia” right now. And the poster child for that is TSMC, whose Arizona investment has scaled from an initial $12 billion commitment in 2020 to $265 billion today — the largest foreign direct investment in U.S. history. For context on how fast that number moved: it was $40B in 2022, $65B in 2023, $165B in 2025 (itself the largest private investment in U.S. history at the time), and $265B this year. Manufacturing jobs like this don’t just create manufacturing jobs, either — the multiplier is 4 to 6 additional jobs for every single manufacturing position. That ripple effect is exactly why retail and net-lease product in the path of this growth matters.
The Part Nobody Puts on the Postcard
Here’s where it got interesting, and where I think a lot of outside capital gets the wrong picture of this market. Mackay was refreshingly candid about the constraints behind the growth curve, and she ranked them:
- Water. Groundwater pumping is not a renewable source, and everyone in this room knows it. Advanced water purification — the “use, process, reuse” model — is on the table, but it’s expensive. Even something as unglamorous as swapping chillers for air-cooled systems in industrial and data center product is being pursued specifically to cut water demand.
- Power. Mackay called this the biggest problem, full stop. The region needs more power. Right now, 8,600 megawatts, are produced by both SRP and APS. They are the ones who have to figure out how to deliver it.
- Infrastructure. Ranked third, but not far behind. Only 18% of land in Arizona is developable in the first place, which puts real pressure on how — and where — we build.
There was some good dry humor in the room too. When someone asked about a proposed Loop 404, Mackay’s answer was essentially: don’t hold your breath, “that’s a wash.” Meanwhile, real infrastructure is moving — light rail is planned for I-17/Deer Valley, SR30 is being built as a reliever to I-10, and the 505 Outer Loop will connect Casa Grande/Queen Creek to Buckeye, effectively wrapping the far edges of the growth map.
What This Means If You’re Underwriting a Deal
A few things I’ll be watching closer because of this session:
- Site selection follows the constraint map, not just the growth map. Pinal County and the West Valley are where the population is going, but power and water availability will dictate which specific submarkets actually deliver rooftops and retail demand on schedule — and which ones stall.
- Phoenix is not yet a Tier 1 office market, by Mackay’s own admission — worth remembering before anyone gets too far ahead of themselves on office-to-anything conversion stories.
- The “starter home” conversation is shifting. Build-to-rent product is increasingly being positioned as the new starter home, though not everyone in economic development circles agrees that’s the right framing. Either way, it changes what rooftop demand looks like in the corridors feeding new retail.
- Solar incentives are drying up with federal funding cuts, which is a small but real variable for any owner thinking about rooftop solar as a value-add.
Arizona’s growth story is real, and the TSMC trajectory alone should make anyone in commercial real estate pay attention to the industrial and retail demand it’s pulling behind it. But growth without water, power, and infrastructure is just a projection on a slide. The operators and investors who do well here over the next decade will be the ones underwriting to the constraints, not just the tailwinds.
Full data and reports are available at GPEC.org.
Phoenix’s Growth Story Has a Catch: Notes from the Columbia Bank Economic Outlook
Thank you Chris Pettiet for the invite this morning to the Arizona Biltmore for Columbia Bank’s 2026 Economic Outlook, with Christine Mackay of the Greater Phoenix Economic Council (GPEC) running through the numbers. If you sell, lease, or invest in Arizona real estate, this is the kind of presentation where you fill up a legal pad fast. Here’s what stood out — and why it matters for anyone underwriting a deal in this market right now.
The Numbers Behind the Hype
GPEC covers 22 cities and towns across Maricopa and Pinal counties — 14,000 square miles that together represent 78.4% of the state’s entire economy. Over the past 36 years, GPEC has helped recruit more than 1,120 jobs and 200,000+ employees to the region. That’s not a marketing stat — that’s decades of compounding.
A few more data points worth sitting with:
Mackay’s line stuck with me: Phoenix is the “Belle of the Ball for Asia” right now. And the poster child for that is TSMC, whose Arizona investment has scaled from an initial $12 billion commitment in 2020 to $265 billion today — the largest foreign direct investment in U.S. history. For context on how fast that number moved: it was $40B in 2022, $65B in 2023, $165B in 2025 (itself the largest private investment in U.S. history at the time), and $265B this year. Manufacturing jobs like this don’t just create manufacturing jobs, either — the multiplier is 4 to 6 additional jobs for every single manufacturing position. That ripple effect is exactly why retail and net-lease product in the path of this growth matters.
The Part Nobody Puts on the Postcard
Here’s where it got interesting, and where I think a lot of outside capital gets the wrong picture of this market. Mackay was refreshingly candid about the constraints behind the growth curve, and she ranked them:
There was some good dry humor in the room too. When someone asked about a proposed Loop 404, Mackay’s answer was essentially: don’t hold your breath, “that’s a wash.” Meanwhile, real infrastructure is moving — light rail is planned for I-17/Deer Valley, SR30 is being built as a reliever to I-10, and the 505 Outer Loop will connect Casa Grande/Queen Creek to Buckeye, effectively wrapping the far edges of the growth map.
What This Means If You’re Underwriting a Deal
A few things I’ll be watching closer because of this session:
Arizona’s growth story is real, and the TSMC trajectory alone should make anyone in commercial real estate pay attention to the industrial and retail demand it’s pulling behind it. But growth without water, power, and infrastructure is just a projection on a slide. The operators and investors who do well here over the next decade will be the ones underwriting to the constraints, not just the tailwinds.
Full data and reports are available at GPEC.org.