Phoenix holds onto Top 10 spot on real estate list while other Western cities fall off

A new report from the Urban Land Institute finds some good news for Phoenix, even as other cities in the west fall off a bit.

The Emerging Trends in Real Estate 2026 report finds the Western region had the lowest real estate prospects among the five regions across the country; Phoenix is one of two cities on the overall top 20 list, keeping its spot at number 10 from last year.

Steve Lindley is the COO of the real estate investment firm Holualoa Companies and the chair of the Urban Land Institute Arizona. He spoke with The Show more about this — and he started with what he thinks 2026 might look like real estate-wise in Arizona.

Full conversation

STEVE LINDLEY: Yeah, we've been talking a lot about that at ULI, and that's a big part of the ULI Emerging Trends Report. It's been foggy. They're actually calling the report Navigating through the Fog. It started in 2023. We saw interest rates spike and persistent inflation. And it got very hard to make good decisions as it related to real estate.

And this last year was still foggy, right. We had tariff and trade uncertainty, interest rate uncertainty. Inflation seemed to be getting better, but it wasn't for sure. And so right now we don't do fog very well in Arizona. I can feel the fog lifting, and there's an opportunity to make better decisions and more informed decisions now.

BRODIE: In what ways do you feel the fog lifting? Because it seems like there's still a fairly high level of uncertainty in a lot of different areas.

LINDLEY: There is for sure. We were building a lot when interest rates were cheap of all different product types, and people have stopped building. So if you go to downtown Phoenix and we used to have 20 cranes up at one point in time, there's very few cranes, and the ones that are up are kind of going away. We've all seen that.

And so when you're building less, you kind of know what the supply is. And Arizona's been very healthy as it relates to demand. We've had people moving here. We've had job growth, very healthy job growth. And that fills up the apartments and fills up the industrial buildings and fills up the space that we've been building.

BRODIE: When you talk about people moving here, of course, everyone needs a place to live. And for years we've been hearing that there aren't enough places to live, either to buy or to rent. Does it seem as though that's going to get dealt with or improve at all?

LINDLEY: No, it's still a challenge. It's a challenge nationwide. It's a challenge in Arizona. We Have a short term oversupply, we built too much all at the same time. But there's sort of a risk in that, which is we need new supply of housing long term, but short term people are stopping because rents have gone down.

It's harder to build with lower rents. And so if we don't start building again, we're going to continue to have housing shortages in our market.

BRODIE: When you talk about non-residential development and building, what kinds of building, what kinds of trends are you seeing for 2026 for Phoenix?

LINDLEY: Office is a really interesting trend because we came out of COVID and everyone said, we're all going to work from home forever, nobody's going back to the office. And that turned out to be wrong. We are going back to the office. We're going back differently now. And so you have some buildings that are vacant.

They're typically old call centers. You have a few people taking vacant office buildings and converting them into residential apartments. That's very tricky. But a lot of offices are thriving because we are going back. really like are.

BRODIE: Really, like are they being designed or developed differently than they were prior to say 2020, 2021?

LINDLEY: Yes. It's part location. You want to be someplace that's high amenity, has a lot of good reasons to be there. Because it used to be you had to go to an office to go to work. Now you want to go to an office. It has to be a place where you can collaborate, where you can innovate.

And so you have to build something that's way nicer, has way more amenities in the space, has conference rooms in the space. A place where when you see that building or that space, you say, I want to sign on the dotted line and go to work there.

BRODIE: Interesting. What are you seeing as it relates to retail, which is of course such a big part of the Valley here?

LINDLEY: Correct. Retail got so hurt in the Great Recession. Very similar to office today where people said we're all going to shop at Amazon and nobody's going to go shop at a retail anymore. That is wrong. Amazon's a huge company now and we do all shop on Amazon. But it caused us not to build enough retail for decades.

Really, 10 or 15 years we haven't built enough. Now it's full now. When you see a retail center, you kind of know who's there, a restaurant, a service provider. And those buildings are full. They're not quite in favor yet. But a lot of investors are starting to look at buying them for that reason. It's got limited supply.

BRODIE: Where does Phoenix sit relative to maybe some of its neighbors in the West and Southwest in terms of maybe the rest of the country? Is this still a place that is seeing a ton of people coming and a ton of development, a ton of interest in people building and developing here?

LINDLEY: Yes, it's getting a lot of interest. It's kind of interesting. Our growth used to be one dimensional and our growth was our own growth. Our economic development officials would bring companies in and if there was a lot of jobs, they liked it, even if they were low paying, poor jobs. And now with the Taiwan semiconductor effect, $165 billion worth of new development, all the companies that's spinning off, the health care with $1.9 billion at Mayo Clinic.

And you can go on and on. Our economic development officials are doing a fantastic job that's bringing healthy people to our city. People who are well paid. And it's not just all the scientists and the engineers. That is what we think of in those plants. There's the construction workers, the people who are building the plants, the lab technicians and the people are maintaining them. And those are all great jobs.

BRODIE: One of the things that the report found was that this region, the West, had the lowest average real estate prospect score among the five regions in the country. And there were two markets here that ranked among the top 20, Phoenix being one of them. What does all that say to you?

LINDLEY: Yeah, markets are segmented right now. So on the Top 10 list, you've got six in the Sun Belt. The other four are all around New York. By coincidence, Austin used to be on the list all the time. It's not. Denver used to be on the list all the time. It's not.

I would not bet against Austin or Denver. Those are great cities, but they just built a little too much. Built more than we did here. Didn't quite grow out. They will come back and there'll be strong markets. And so Phoenix is definitely one that we've overbuilt and had some challenges. And that fog of uncertainty, we've done a better job of navigating through that.

BRODIE: So why do you think it is that Phoenix has been able to sort of maintain its place when some of those other cities in this region have not?

LINDLEY: Yeah, so it hasn't been a supply problem. We've been building a lot. We've seen the cranes. We built a lot of homes, we built a lot of apartments. It's been a demand. And so people are moving here. Great jobs are coming here, new employers are coming here. You'll hear people talking to international companies and they don't say, should I come to the U.S., should I come to the Western U.S. They say, should I come to the Phoenix metro area?

And Phoenix continues on an employment growth basis to grow at double the national average we have for many years. And that's expected to continue.