Super Bowl Spotlights Phoenix Area, Where the Skyline Has Yet To Catch Up to Soaring Population Article originally posted on CoStar on February 13, 2023 State Farm Stadium in Glendale, Arizona, is the site of Sunday’s Super Bowl between the Kansas City Chiefs and Philadelphia Eagles and the third time pro football’s big game has been played in the stadium since it opened in 2006. (Getty Images; Jelena Schulz/CoStar) Eagles, Chiefs Showcase a Desert Oasis of New Towers Sunday’s Super Bowl matchup between the Philadelphia Eagles and Kansas City Chiefs will cast a spotlight on one of the country’s fastest-growing real estate markets. Most of that growth has been outward rather than upward. Professional football’s big game will be played at State Farm Stadium in Glendale, Arizona, northwest of Phoenix, a city that’s been shooting higher on the list of the nation’s most populous cities. But the state’s largest city has the distinction of a massive surge in population and real estate without really elevating its skyline. Here’s a look at the real estate that will serve as a backdrop to Sunday’s much-watched contest: Tallest Buildings Phoenix’s skyline is much lower than any other city among the top five populations in the United States. Its tallest towers were constructed decades ago when it was a much smaller city. Arizona’s tallest building is the 38-story, 483-foot-tall Chase Tower office building in downtown Phoenix. Completed in 1972, it is No. 6,905 on the list of the world’s tallest skyscrapers, according to the Council on Tall Buildings and Urban Habitat. The second-tallest tower in Phoenix, and in the state, is the 407-foot-tall U.S. Bank Center, which opened in 1974. Compare that with the tallest towers in the two Super Bowl cities, also both office towers: Philadelphia’s Comcast Technology Center, rising 1,120 feet, and One Kansas City Place, reaching 623 feet. The tallest U.S. building is the 1,776-foot-tall One World Trade Center in Manhattan. Despite a population boom, there has been little motivation for developers to reach higher into the sky, considering land is relatively affordable and plentiful. Phoenix’s land area, at 518 square miles, is larger than that of New York, Los Angeles and Chicago. The only city with a larger population and greater land area is Houston, with more than 640 square miles, according to U.S. Census data. The peak of Phoenix’s skyline has remained unchanged even as the population in the city and surrounding area has soared. (Getty Images) Population When Glendale hosted Super Bowl XLIX eight years ago, Phoenix was on the cusp of overtaking Philadelphia as America’s fifth-largest city by population. Phoenix’s population grew 11.2% between 2010 and 2020 to 1.6 million, faster than any city in the nation, according to census data. Greater Phoenix has added more than 2 million people since Arizona hosted its first Super Bowl in 1996. The region’s population is now approaching 5 million, fueled by nearly 16% growth between 2010 and 2020, census data shows. Residential and commercial growth has extended west into the desert, vaulting the once-sleepy suburbs of Goodyear and Buckeye into the top 10 fastest-growing smaller cities in the United States since 2010, according to the census. Companies have set up shop or expanded over the past year in the region to make and distribute such products as energy drinks, electric vehicles, electronics, kitchen fixtures and computer chips, which have been harder to get amid supply-chain disruptions during the pandemic. Taiwan Semiconductor Manufacturing Co., the world’s largest computer chip maker by volume, recently announced it plans to triple its $12 billion investment with construction of a second semiconductor fabrication facility in North Phoenix by 2026. The region has room to spread: it’s the largest metropolitan area in the Southwestern United States by geography, at 14,500 square miles. The area including Maricopa and Pima counties is bigger than the entire state of Maryland and makes up more than one-third of Arizona, the nation’s sixth-largest state by square mileage. In addition to thousands of houses and apartments, developers have built millions of square feet of offices, shopping centers and warehouses over the past decade. Since the region’s last Super Bowl in 2015, builders, including many that are based outside of Arizona, have added nearly 100 million square feet of warehouses across massive districts that stretch west into the desert, according to CoStar data. Spurred in part by the arrival of tech companies lured by Arizona’s lower business costs, the growth has attracted middle-class families from California and other more expensive parts of the country. At 483 feet, Chase Tower is Phoenix’s tallest building. The namesake tenant occupied most of the building before moving the last of its employees to nearby Tempe, Arizona, in late 2021. A mixed-use redevelopment is planned for the 38-story tower at 201 N. Central Ave. (CoStar) Shifting Office Market Three banks have moved their office footprint out of downtown Phoenix and consolidated in the suburbs during the pandemic. JPMorgan Chase, which occupied the majority of Chase Tower, moved the last of its employees to a new office campus in Tempe, Arizona, in late 2021. A venture of Vincent Viola, who also owns the Florida Panthers National Hockey League team and founded Virtu Financial, closed the building at the end of 2021 to start a massive renovation aimed at converting the tower at 201 N. Central Ave. to a mixed-use project. Minneapolis-based U.S. Bank announced last summer that it was moving out of the city’s second-tallest tower. It is owned by Portland-based ScanlanKemperBard Cos. Wells Fargo in 2021 agreed to sell its 24-story building at 100 W. Washington St. to the city of Phoenix as part of a consolidation to create a central government campus next to City Hall. Like many markets adjusting to the effects of COVID-19 and work-from-home trends, the Phoenix area is experiencing tepid overall office demand. That has led to an unusually large amount of space available for sublease — 3.8% of the total inventory of available space, one of the highest rates in the country, according to CoStar data. Companies that have put blocks of space on the sublease market include Carvana, DoorDash, PayPal, GoDaddy and Opendoor. Other Property Types Industrial: A record 47.2 million square feet of warehouse space is scheduled for completion this year, making Phoenix the second-fastest-growing market in the country, according to CoStar data. Growth has been fueled by new jobs and residents, overall strong demand throughout the country in the sector and proximity to major ports in Los Angeles and Long Beach, California. Rents have grown 16.4% over the past year. Overall vacancy at the end of 2022 was 4.9%, up from a record 4.3% at mid-year. Industrial property sales soared to a combined $5.5 billion last year, up from $2.9 billion the previous year. The volume fell to $4.5 billion in 2022 as rising interest rates and other economic factors slowed the pace of real estate deals throughout the country. Multifamily: Earlier in COVID-19, Phoenix experienced record demand, rent and supply. About 17,000 units were completed in 2022, a record pace that made it one of the most aggressively built areas of the country, according to CoStar data. After leasing slowed, overall vacancy rose to 9.4%, the highest level in more than a decade. Over the past year, rents have fallen by 1.2%. Developers remain optimistic for the long term, with 29,000 new units underway. Sales of apartment buildings reached a record $15.7 billion in 2021, up from $6.4 billion the previous year. The volume fell to $13.5 billion in 2022. Retail: There was a combined 4.4 million square feet more space leased than vacated over an 18-month period, pushing overall vacancy to 5.3% at the end of 2022, the lowest level on record, according to CoStar data. Despite the possibility of a recession, vacancy is expected to fall further in 2023, boosted by leasing momentum and relatively little new construction in the pipeline. Super Bowl Venue The site of the Super Bowl was an engineering marvel when it opened in 2006 as University of Phoenix Stadium, home to the NFL’s Arizona Cardinals. Now known as State Farm Stadium, the venue has a retractable roof that can be closed during extreme desert heat. It also has a unique feature for enclosed domes or retractable-roof stadiums: natural grass. On game days, a tray containing the nearly 20-million-pound grass playing surface rolls into the stadium, traveling 740 feet. Powered by motors, the field platform rolls on wheels within a track leading into the stadium. The stadium was designed by architect Peter Eisenman and architecture firm HOK. Sunday’s game will be the third Super Bowl in the Arizona stadium, following the New York Giants’ victory over the New England Patriots in 2008 and the Patriots’ victory over the Seattle Seahawks in 2015. Other events held there include the annual Fiesta Bowl college football bowl game, college football national championship games, the NFL’s Pro Bowl, concerts and other sports and entertainment events. The NCAA men’s basketball Final Four was played there in 2017 and will return in 2024.