Ambassador Event: Site Selector Panel

How Greater Phoenix, Arizona and the United States can attract more international investment

As the new presidential administration enters office, international companies are looking for answers on how investment in the United States and Arizona may change.

Site selectors visiting for the WM Phoenix Open joined the Greater Phoenix Economic Council (GPEC) for a panel discussion focused on foreign direct investment (FDI) and the local office market landscape. Panelists for this GPEC Ambassador Event included:

• Linda Bonelli, Partner, Deloitte LLP
• Ford Graham, Senior Vice President, McGuireWoods
• Zachary Leger, Senior Associate, Stream Realty Partners
• Meredith O’Connor, Executive Managing Director, JLL
• Thomas Maynard, Senior Vice President of Business Development, Greater Phoenix Economic Council (Moderator)

When working with international companies, establishing relationships can be even more important than with domestic companies due to unfamiliarity with the market.

“Their expectations are much different than what you’re probably used to with American companies,” Bonelli said. “It may seem like you’re being asked to be overly flexible, but I think that is something that is really going to win your jurisdiction over.”

Informing international clients

Foreign companies seeking opportunities in the U.S. typically aren’t well-versed in the local development landscapes. Site selectors act as guides to showcase regions executives may have never heard of.

“It does take a lot more effort than a normal American company because you’re really teaching somebody what they need to know and how they need to work in the U.S.,” Graham said, “but when you give it the time it needs, it does build loyalty with that company.”

This means bringing maps to showcase how the area fits into the larger regional picture. It means exhibiting the community of other international companies in the region. It means being prepared with data.

“If you come doing your homework, you’ll going to like a rock star,” O’Connor said.

Gathering partners and champions for the region helps tell a more complete story. Large logistics operations may seek answers regarding the local intermodal system, while utility companies can go in-depth on power and water. Education institutions help share information about the talent pool and other resources or innovation centers.

“Always bring your universities,” O’Connor said. “I think about life sciences here in Arizona — you have a total opportunity to start building a story that you are a life science state. It’s cheaper, you have all of the resources and the institutions to bring those jobs here. When you think about Boston and San Diego, it’s way too expensive … It’s kind of open for the taking of who’s next.”

How federal legislation may impact FDI

International companies have their eyes on tariffs, potential changes to the Inflation Reduction Act (IRA), and the status of the BIOSECURE Act.

In February, President Donald Trump postponed tariffs against Mexico and Canada and instituted 10% tariffs on China. International companies have a “general concern” about how tariffs, which have also been threatened against Taiwan and the European Union, would impact supply chains, and if they need to consider expanding operations into the U.S, Graham said.

“A tariff became a verb in the last administration, and it will again, and [companies] want to be on the inside, so to speak,” Graham said.

The IRA, signed into law by former President Joe Biden in August 2022, offers grants and subsidies related to industries including clean energy and electric vehicles. This, in addition to the CHIPS and Science Act, has spurred investment into the U.S., and the CHIPS Act in particular drove federal funding into Arizona.

Under a new administration, there could be changes to these pieces of legislation. Global companies are watching to see how the Trump Administration will modify the IRA.

“If that’s extended and stays in place, if the grant funding is still at the same levels that it has been the past three years, we should expect the kind of investment from foreign subsidiaries,” Bonelli said.

The BIOSECURE Act, a House bill that would prohibit federal funds from using biotechnology from a company associated with a foreign adversary, has been working its way through Congress since mid-2024. Global companies are paying attention to this legislation, which would prevent U.S. pharmaceutical companies from working with Chinese bioscience manufacturers, suppliers, and research and developers. Leger believes foreign companies will seek to establish U.S.-based locations as alternatives if it moves forward.

Office and industrial space

Since the COVID-19 pandemic, the balance of office and industrial projects in Greater Phoenix has heavily shifted toward the latter. But an office heartbeat has started to surge, with companies including Dutch Bros and Fender recently announcing office expansions in the region.

Businesses are flocking to Class-A office space with more amenities and features that attract employees. “[Companies] really want the FOMO factor,” O’Connor said. “The best story always wins.”

While O’Connor said many companies have employees in-office three or more days a week, Bonelli said she has seen an uptick back to five and expects the vast majority of companies to mandate the full work week in-office by the end of 2025. However, they’ll have to convince employees who desire more privacy than the modern open-office model.

“I think the design of the office space for a lot of my clients … is changing to maybe having something we haven’t seen yet, maybe a mix of old and new to get people excited to come back,” Bonelli said.

Leger, who focuses on industrial space in life sciences, said Greater Phoenix has attractive manufacturing facility offerings for the industry, including high-quality space in health corridors including the Phoenix Bioscience Core, Park Central and Scottsdale Cure Corridor.

He explained that companies in emerging markets often see a success story and try to replicate the real estate without fully understanding the associated costs. “It’s a real-estate-driven problem in that ‘We need to build the coolest building,’ but it’s completely unaffordable,” Leger said. In other markets, flex spaces are not sufficient for many components of the pharmaceutical industry.

With a varied inventory and infrastructure supportive of numerous cutting-edge industries, Greater Phoenix has maintained its standing as a choice market for site selectors seeking suitable properties and economic landscapes for their clients.