The number of cranes in downtown Phoenix has remained mostly steady throughout 2023 with the latest count totaling seven cranes in the third quarter.
This is a slight decrease from nine cranes in the first quarter of 2023 and is a result of several projects being completed including two major health care developments, according to the latest North America crane count from Rider Levett Bucknall.
Since the first quarter, however, six new cranes have been added to the downtown Phoenix skyline, demonstrating ongoing activity in high-rise construction on mostly infill properties within a six-mile radius of the Central Avenue and Washington Street intersection.
“There’s been a big evolution in Phoenix over the last several years in density,” said Scott Macpherson, an executive vice president for RLB. “There’s some huge pros to that. It’s become a more livable city, a more walkable city because the buildings actually cast natural shade. … You get a lot of people who are living in downtown and therefore supporting downtown businesses.”
The seven cranes counted in the third quarter were for two mixed-use projects and five residential developments.
Phoenix city officials previously said that downtown Phoenix had 11 cranes this summer, while a number of major projects that also require cranes are being developed across the entire Phoenix metro. Phoenix is also a relatively younger market compared to other major cities and is much more geographically spread out.
Challenges ahead: Project financing, fewer infill opportunities
Macpherson said he believes downtown Phoenix will continue to see momentum in development as a result of progress made in the past few years on new projects. As more infill sites are built out, however, he said it could become challenging to find sites for development moving forward.
Get more construction coverage from across the Valley by signing up for one of the Phoenix Business Journal’s newsletters.
Other markets that kept a steady number of cranes in Q3 included New York, Portland, Honolulu, Seattle and Calgary, Canada. The markets with the highest number of cranes were Toronto with 240, Seattle with 45, and Los Angeles with 30 cranes.
Chicago, Washington, D.C., Denver, Los Angeles, Las Vegas and San Francisco saw a significant decrease in cranes since the last survey, or a more than 20% decrease per market as interest rates continue to increase, projects are delivered and construction slows.
Only Toronto and Boston saw an increase in the number of cranes and totaled 240 cranes and 20 cranes, respectively, in Q3. The overall crane count between the 14 markets decreased by 10% since the previous count.
Despite the downward trend, RLB reported that residential and mixed-use projects have seen the most consistent growth. The number of cranes in the 14 markets is also expected to remain steady for the rest of 2023.
In addition, RLB found that major markets such as Phoenix, Los Angeles, San Francisco, Boston, Denver and Washington, D.C., experienced construction cost increases below the national average of 1.55% from April to July 2023.
From July 2022 to July 2023, Phoenix saw a 6.52% increase in construction costs, and a further 1.3% increase during the third quarter.
Macpherson said that the construction industry has continued to experience challenges for financing projects as a result of the increase in interest rates but the ongoing supply chain issues have started to ease up some. Availability of skilled and unskilled construction workers in Arizona has also remained a challenge, he added.