Opportunity Update for the Phoenix Market: 12/12/22

[Melanie Johnston]

Last week the President of the United States and Tim Cook, the CEO of Apple Inc., among other dignitaries, came to town to commemorate a milestone at Taiwan Semiconductor Manufacturing Company’s (TSMC) mega chip-production facility under construction in north Phoenix.

TSMC used the event to announce it will build a second chip fabrication (fab) facility here, tripling its investment from $12 billion to $40 billion. This represents "the largest foreign direct investment in Arizona history and one of the largest foreign direct investments in the history of the United States,” according to the company's Dec. 6th statement.

"In addition to TSMC Arizona’s first fab, which is scheduled to begin production of N4 process technology in 2024, TSMC has also started the construction of a second fab which is scheduled to begin production of 3nm process technology in 2026," the company said. 

The Taiwanese Chambers of Commerce of North America reports that about 40 companies that support TSMC’s operations have established facilities and offices in Phoenix.

What does this mean for residential real estate investors?

The TSMC statement revealed, “In addition to the over 10,000 construction workers who helped with construction of the site, TSMC Arizona’s two fabs are expected to create an additional 10,000 high-paying high-tech jobs, including 4,500 direct TSMC jobs.”

We don’t have all the 10,000 high-paying high-tech workers in town now, which means new residents who will be moving here, needing to rent or buy a home.

So which cities and neighborhoods could benefit most?

The massive TSMC facility is in far north Phoenix near the intersection of Interstate 17 and the Loop 303 freeway. Because of this freeway access, employees can be drawn from several areas that offer a reasonable commute.

While builders have already begun acquiring land west and northwest of the facility for new housing developments, for current housing stock it's easiest to look at—and search for—likely residential areas for future TSMC employees by zip code. Pay attention to zip codes west and south of the facility for more affordable options.

North of TSMC

• 85086 includes the master planned community of Anthem, which is likely to get a boost with its middle- to high-income homes.

East of TSMC

• 85085, 85024, 85027, 85050, 85054. These zip codes offer more affordable to higher-end homes.

South of TSMC

• 85083, 85310, 85308. These zip codes provide proximity while also offering a wide range of price points.

West of TSMC

There is a lot of commercial growth happening along the newly developed Loop 303, especially along its northern leg, in response to TSMC’s arrival. This will become a major employment hub and there are already well-established neighborhoods that will benefit from their location.

• 85383 is the closest and most developed zip code for nearby housing. The city of Peoria offers a wide range of price points, giving investors more options.
• 85374, 85388 and 85379 (City of Surprise) will also be easily accessible via the 303.

Workers will come from many other surrounding cities, making their choices based on lifestyle, school districts and commute times. The zip codes above offer attractive options to investors looking for long-term holds, and possibly for short-term rentals for executives getting their bearings before they buy.

But as TSMC’s $40 billion commitment shows, metro Phoenix is a magnet for employers looking for a foothold in a still-emerging, business-friendly environment.

This puts Arizona’s growing economy on the radar of real estate investors at all levels.