Global Smart City Investment Growth

Slated to break ground by late 2025 with a ~36-month construction timeline, Astra Phoenix will redefine the downtown skyline. Its mixed-use program (vertical stacking of commercial, residential, hospitality) promotes densification. From a portfolio perspective, premium vertical product in central cores often commands better rent and stability. Zoning and permitting risk is substantive for such scale; incentives or height overrides might be required. For tax and municipal planning, increased density yields more property tax and systems demand. Its design likely will incorporate green systems given current best practices.

The projects address demand spillover from central Phoenix to peripheral areas such as Maricopa. The Sanctuary master plan is one of the larger new proposals south of the metro. These add supply but also stress infrastructure, utility extension, and water sourcing. Investment risk is higher in fringe zones due to longer absorption times and infrastructure cost. From a tax vantage, these areas may require public subsidies or impact fee structuring. Regulatory approvals (entitlements, grading, environmental) will be bottlenecks. In terms of long-term stability, communities closer to major arterials or transit corridors may outperform in such growth zones.

The Valley is seeing many sellers withdraw properties rather than reduce price or continue listing, driven by mismatches between seller expectations and buyer demand. Heat, mortgage rates, and buyer caution all factor. This trend increases illiquidity risk for residential portfolios. From a tax perspective, fewer closed sales slow turnover and thus compress transaction tax revenue. Local governments may respond with incentive or marketing programs. In value terms, homes in prime nodes or strong school districts will better resist these pressures.

The acquisition includes retail, office, and experiential components. The improvement plan emphasizes infrastructure upgrades, curated tenant mix, and experiential retail elements. Phased work is timed to minimize disruption. Such repositioning deals often reveal value-creation opportunities in undercapitalized assets. For investors, this is a signal that well-located assets still attract capital even amid softening market conditions. Local tax capture or improvement district structures may be involved. As for sustainability, renovations often incorporate energy retrofits, waste reduction, and modernized systems.

In recent weeks, Phoenix has seen its number of active listings rise markedly compared to prior quarters; concurrently, about 5.5 % of listings in a given week are undergoing price cuts. This dynamic signals softening seller leverage, particularly outside top-tier neighborhoods. For wealth holders, this underscores the need for granular underwriting. Municipal tax bases may feel pressure if downward adjustment persists. Regulators may reconsider permit timing incentives or relief. From a resilience lens, established, amenity-rich areas will remain comparatively stable.

A new analysis shows that Phoenix developers managed—temporarily—to outpace demographic growth via multifamily construction between 2022 and 2024. But that momentum is already fading, and forecasts suggest population growth will again overtake housing additions by 2026. The short-lived balance eases pressure on pricing, but rising costs and tight credit may prevent a sharp downturn. For portfolio holders, this grants limited downside buffer. On the policy side, it may moderate calls for emergency incentives. In terms of long-term value, locations with strong fundamentals remain safer bets as supply and demand re-equilibrate.

Among them is a project of ~1,300 units (Optima McDowell Mountain) with extensive retail and open space, a live-work district tied to Axon’s HQ, a multi-building “Parque” project combining hotel, retail, and residences, and expansions in office / innovation campuses. These projects reflect confidence in Scottsdale’s premium positioning. For high-net-worth allocations, these may offer differentiated yield profiles. Zoning and approvals remain key risk levers. Such densified, compact projects align with smart city and sustainable growth priorities.