Introduction
Phoenix, Arizona is a vibrant and rapidly growing city with a population of over 1.6 million people. The city offers a diverse and dynamic market for entrepreneurs looking to start a shopping centers business. In this article, we will explore the potential of the shopping centers industry in Phoenix, discuss the investment required, the expected return on investment, and suggest suitable locations for shopping centers.
Population Distribution and Important Residential Areas
Understanding the population distribution in Phoenix is crucial for identifying the target market for a shopping center business. The city is divided into various neighborhoods, with some notable residential areas attracting a significant number of residents.
North Scottsdale is an affluent residential area with a high household income, making it an attractive location for luxuryoriented shopping centers. Downtown Phoenix, with a mix of residential and commercial spaces, is another vital area to consider. The Arcadia neighborhood, located between Scottsdale and downtown, offers a prime location with a mix of middle to upperclass residents.
Investment and Return on Investment
Starting a shopping centers business in Phoenix requires a substantial investment. The cost of acquiring land or leasing commercial space will be a significant part of the initial expenses. Additionally, construction or renovation costs, obtaining necessary permits, staffing, marketing, and initial inventory should also be considered.
On average, an initial investment of $23 million is required for a midsized shopping center. This estimate includes land acquisition, construction costs, permits, and initial inventory. The return on investment can vary depending on various factors such as the location, tenant occupancy rate, and the overall economic conditions. However, a wellmanaged shopping center can generate a return of 810% annually.
Ideal Shopping Centers Locations in Phoenix
- Biltmore Fashion Park: Located in the Biltmore neighborhood, this upscale area attracts residents with high purchasing power, making it an ideal location for luxury shopping centers.
- Desert Ridge Marketplace: Situated in North Phoenix, this neighborhood is densely populated with a mix of residential and commercial spaces. With its familyfriendly environment, it offers an excellent opportunity for shopping centers catering to a wide range of customers.
- Tempe Marketplace: In the heart of Tempe, this area is known for its vibrant nightlife and young population, making it suitable for shopping centers targeting the millennial demographic.
- Scottsdale Fashion Square: As one of the largest shopping malls in the country, this upscale destination draws visitors from across the region. With its high foot traffic and affluent customer base, it presents a promising opportunity for luxuryoriented shopping centers.
Conclusion
Starting a shopping centers business in Phoenix, AZ can be a rewarding venture given the city’s population growth and diverse market. While the initial investment can be significant, the potential return on investment makes it an attractive sector to explore. Selecting suitable locations like North Scottsdale, Downtown Phoenix, and Arcadia will help maximize the chances of success. With proper planning, a wellmanaged shopping center can thrive and contribute to the vibrant retail landscape of Phoenix.