Commercial Real Estate News / General CRE / Mesa, AZ vs. Phoenix, AZ: Which Is Better for Businesses?

Mesa, AZ vs. Phoenix, AZ: Which Is Better for Businesses?

Published: 05-20-22 Category: General CRE

Specializes in providing actionable insights into the commercial real estate space for investors, brokers, lessors, and lessees. He covers quarterly market data reports, investment strategies, how-to guides, and top-down perspectives on market movements.

There are few cities in the U.S. that can compete with the incredible growth we’ve seen from metro areas like Phoenix and Mesa, AZ over the past few years.

Both cities have experienced an influx of businesses and opportunities for both residents and business owners alike, but which city is better for businesses?

Whether you’re thinking about launching a new business or moving your existing business to one of these cities, it can be difficult to know which location will provide the best business environment for your company.

For anyone considering investing their time and money in either city, here’s a look at some key differences between Mesa vs. Phoenix as an ideal place for businesses.

Population Comparisons

The population of Mesa, Arizona is 548,213 people. Phoenix has a population of 1,759,940.

Phoenix has a population that is more than three times larger than that of Mesa.

Both metro areas have seen significant growth over the past decade.

The two cities are also surrounded by similar, diverse communities and similar economic opportunities for new businesses and entrepreneurs looking to launch their businesses in Arizona.

Average Demographics

In Phoenix, the population demographics in 2022 were:

Median age is 33.3 years old.
50.2% of the population is female.
15.7% of the population is between the ages of 25 to 34.
43.3% of the population identifies as White.
6.6% of the population identifies as Black.
42.5% of the population identifies as Hispanic.

In Mesa, the population demographics in 2022 were:

Median age is 35.9 years old.
50.6% of the population is female.
14.7% of the population is between the ages of 25 to 34.
62.6% of the population identifies as White.
3.5% of the population identifies as Black.
27.4% of the population identifies as Hispanic.

The city of Phoenix is younger and more diverse than the city of Mesa.

Average Household Income

The average household income in Mesa is $77,738.

The average household income in Phoenix is $80,631.

Commercial Real Estate Comparisons

Mesa is a city that has experienced steady growth since the 1990s.

In addition to having several new hotels, shopping malls, and other retail outlets, there are also plans on building a new technology campus.

Phoenix remains one of the most popular for real estate investment and development in the country.

There are new projects being announced in the city each year and many of these developments are already attracting international investment.

Average Commercial Rents

The average cost of commercial rent in Mesa is:

Class A Office Space: $24.61 per square foot.
Class B Office Space: $20.64 per square foot.
Class C Office Space: $18.47 per square foot.

The average cost of commercial rent in Phoenix is:

Class A Office Space: $30.79 per square foot.
Class B Office Space: $21.93 per square foot.
Class C Office Space: $18.14 per square foot.

It is more expensive to lease commercial real estate in Phoenix when compared to leasing commercial real estate in Mesa.

Commercial Vacancy Rates

The commercial vacancy rate in Mesa is 12.81%.

The commercial vacancy rate in Phoenix is 20.66%.

CRE Market Outlook for 2022

The CRE market is expected to continue to see steady growth in the coming years; however, projected growth rates will likely be lower than those seen during the 2010s.

Arizona is home to some of the most influential businesses in their respective industries and contains a strong workforce that continues to experience rapid growth.

Arizona will continue to be a draw for businesses as the state experiences steady economic growth in cities such as Mesa and Phoenix.

Commercial Activity Comparisons

Commercial real estate is the backbone of the Arizona economy.

Many of the newest CREs are located in greater Phoenix, but there are also many located throughout greater Mesa.

Retail: In-Person Shopping Versus Online Shopping

Today, it is nearly impossible to go anywhere in the U.S. without seeing either a retail store; it is equally as impossible to avoid websites where consumers can order items online.

Local retailers and national chains are pushing consumers online. However, there are still many in-person shopping opportunities in Mesa and Phoenix.

Industrial: Warehouse Storage Activity

One of the most common needs for businesses to consider when starting out or moving operations is a proper storage facility for their industrial products or manufacturing.

If you’re looking for a location that provides affordable industrial warehouses, Mesa and Phoenix both offer plenty of options.

However, Mesa offers more options for industrial warehouses.

Office: Office Space Activity

Like most major US cities, many businesses choose to move their office locations to downtown.

This is due in part to the thriving downtown areas of Phoenix and Mesa.

For anyone looking to rent an office space, finding a location that offers a prestigious and modern environment can be difficult.

However, both cities have a higher-than-average commercial vacancy rate when compared to national averages.

You might be able to find a good deal on office space here.

Multifamily: Vacancy Rates & Leasing Activity

There are many multifamily buildings in Phoenix. This means that there will be plenty of high-density housing options for residents.

For anyone looking to find rental properties or apartments, Mesa and Phoenix both offer a variety of residential options.

Deciding Which Location Is Right for Your Business

As you compare Mesa vs. Phoenix, it’s important to remember that both cities have their own unique business opportunities and infrastructure.

While downtown Phoenix offers more opportunities for high-rise residential buildings and office spaces, Mesa offers better prices for prime locations for industrial spaces and modern offices.

If you’re looking for a stable place to start or expand your business, both Mesa and Phoenix are good choices for any business owner.

While the growth of both cities has been impressive, it’s important to remember that growth is only part of the equation.

There are also many other factors, such as cost of living and skilled labor to consider.

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