Commercial Update: NAIOP

Commercial Corner, Market Update


Tom Johnston
Senior Managing Director,Savills Studley
2015 NAIOP Chairman


The Arizona Chapter of NAIOP is the ninth largest business trade association in Arizona and one of the largest commercial real estate groups in the United States with a membership of more than 750. Our organization recently has made it a priority to reach beyond the office and industrial markets to embrace the retail sector as well.

The organization will be soon be celebrating its 30-year anniversary; consequently, this may now be a good time to communicate where our legislative advocacy started and where it is headed specifically regarding public policy.

About a dozen years ago, the Board decided to concentrate on chipping away at the top perceived impediment to job creation in our state – high commercial property taxes where businesses had among the top five burdens in the U.S. As a result, we made the reduction of the commercial property tax assessment ratio a top priority with the Arizona Chamber and the Arizona Tax Research Association, we were able to reduce the assessment ratio from 25% to 20% over a ten year phase-in period during the 2005 state legislative session. This was followed up by accelerating the assessment ratio decline over six years rather than ten in 2007.

In 2011, NAIOP also played a key role with our same allies plus the National Federation of Independent Businesses (NFIB) to pass an historic “Jobs Bill” (HB2001) that lowered the assessment ratio again from 20% to 18%. These assessment ratio declines have saved the entire business community billions of property tax dollars from what they would have been if the ratio had stayed at 25% or two and a half times the rate homeowner’s pay.

During the election cycle of 2012, NAIOP was a key contributor to two successful statewide proposition tax efforts where we helped stop a permanent statewide sales tax increase (Prop 204) and were able to cap future property tax valuations to no more than 5% per year (Prop 117).

While we have helped Arizona move out of the top tier of highest commercial property tax burdens in the U.S., more remains to be done. Next session, we will work to help put on the ballot Governor Ducey’s plan to support K-12 education through State Trust Land transaction proceeds. NAIOP believes this support will stave off calls to raise taxes or enact a new statewide property tax that could potentially erode the steady progress we have made to be more competitive in attracting high wage jobs to Arizona. We also believe this support will increase and stabilize funding for K-12 in the near term so we can organically improve our workforce and therefore the growth prospects of indigenous firms.

The future of Arizona is looking bright!


Tom Johnston recently joined Savills Studley as Senior Managing Director. His focus is on the representation of tenants in their acquisition and disposition of commercial property. For the past twenty years TJ has been a top producing broker, he managed Cushman & Wakefield held leadership positions with ULI, GPEC and NAIOP.