As Silicon Valley’s Prices Explode, More Entrepreneurs Head to the Silicon Desert, called “Phoenix”


________MAIN  2IMG_221413533311_487776534748646_3433200083310842093_n

Do just once what others say you can’t do, and you will never pay attention to their limitations again.

~James R. Cook


BY ANNA HENSEL  Assistant editor, Inc. PUBLISHED ON: AUG 24, 2016

Here’s how leaders of some of the fastest-growing companies in the U.S. say the tech boom is affecting them.

Much of the tech work force still considers San Francisco the place to be in order to work with billion-dollar companies. But that may be beginning to change.

A recent piece for The New York Times indicates that while Phoenix may not surpass San Francisco in terms of the number of venture capitalists or unicorn companies, it is snagging some tech jobs from the Bay Area, due to the fact that it has become a popular place for tech companies like Uber and Yelp to set up “outpost” offices.

Using data from Moody’s, the Times found that the number of tech jobs in Phoenix–known by some as the “Silicon Desert”–grew by 8 percent from 2014 to 2015, while the number of tech jobs in the Bay Area grew by 7 percent in the same time period. Phoenix still, however, has only about one-fifth as many tech jobs as the Bay Area does.

Owners of some of the Phoenix-based businesses on the Inc. 5000–an annual list of the fastest-growing private companies–say that they have noticed the number of tech jobs in the area increasing over the last three to four years. And they say that for the most part, it’s been positive growth that has helped raise the profile of the Phoenix business community.

“I would say now that nearly half–or at least a good percentage–of the résumés we receive come from outside of Phoenix,” says Frank Begalke, the COO and co-founder of B2Gnow (No. 2039 on the list), a company that provides diversity management software for government agencies.

Begalke and his co-founder, CEO Justin Talbot-Stern, founded the company in San Diego in 1999 but moved it to Phoenix in 2002 after the area proved to be a much more affordable place to do business.

Relumination, a company that implements energy-efficient lighting for commercial and industrial clients and No. 345 on Inc.‘s list, is based in Phoenix but also experimented with opening another office in Southern California in 2012. The experiment lasted less than a year.

“It became pretty obvious, pretty fast, to be honest, that it just wasn’t a good idea,” says CEO and co-founder Daniel Henderson.

According to think tank the Tax Foundation, the 2016 corporate tax rate in California is 8.84 percent, significantly higher than Arizona’s rate of 5.50 percent. Additionally, California’s maximum individual income tax rate is a whopping 13.3 percent (the highest in the nation), meaning that both entrepreneurs and their employees don’t get as much to take home. (In Arizona, the maximum individual income tax rate is only 4.53 percent.)

In addition to the low cost of living, some of the most frequent reasons that the Inc. 5000 entrepreneurs gave as to why Phoenix was a great place for startups included proximity to the Bay Area and the Western United States (it’s a 90-minute flight from San Francisco), the supportive environment of the entrepreneurial community, and the work-life balance.

For Phoenix, the influx of tech jobs provided a much-needed resurgence to a city that was known as the “poster child” for the 2008 housing crash. At its height, lenders were foreclosing on 5,000 Phoenix-area homeowners per month, according to the Arizona Republic.

Jim Prendergast, CEO of Healthiest You (No. 397), is a serial entrepreneur who has lived in Phoenix for 21 years and saw the effects of the housing crash firsthand on the Phoenix startup community. He says that while before the crash there was “no shortage of capital, and people in the real estate business were making ridiculous amounts of money,” he thinks that the level of entrepreneurial activity in Phoenix has now surpassed pre-crash levels. He recently had a successful comeback of his own, after he sold Healthiest You–which lets customers speak with doctors, search for providers, and compare prescription drug prices all on one platform–in June to Texas-based telemedicine company Teladoc for a mix of cash and stock, currently worth more than $155 million.

“Before the collapse, the entrepreneurial community was much more service related, much more real estate related. Now we’re having a lot of tech companies come into town from the Valley,” says Prendergast.

However, it will take some time before the city of Phoenix starts to see the ripple effects of all of these tech companies moving in. The city still has a healthy entrepreneurial community–the Phoenix metro area came in at No. 14 last year on Kauffman’s list of metro areas with the highest rates of startup activity–but it has a long way to go before it catches up to Silicon Valley, or even other well-known startup hubs like Austin or New York City.

Instead, what may be more interesting to watch is what venture capitalist Fred Wilson deems the “spillover effect.” He writes in a blog post that he thinks the entrepreneurial community is “just seeing the start of” the trend of big billion-dollar tech companies opening outposts in big cities like Phoenix and others that have a lower cost of living.

“We will see that story play out across many cities in the U.S. (and outside of the U.S.) in the next five to 10 years,” Wilson writes. “That’s a very healthy and positive dynamic for everyone, including the big tech centers that are increasingly getting too expensive to live in for many tech employees.”

Prendergast says that for now, there’s really only one problem that business owners say has arisen with all of these tech companies moving in: there’s more competition for talent.



Are you ready to sell your Commercial Building in Phoenix  –  Maricopa County , please call me.


I am actively looking to build relationships with Real Estate Investors and Owner Users  for  multi-family, office, retail, industrial and land in Phoenix- Scottsdale-Tucson-Arizona.


Why Phoenix?  This is a very interesting article, you should read it, amazing, there were only 350 K people living in Phoenix in 1950


Phoenix Commercial Real Estate and Investment Real Estate: investors and Owner / Users need to really know the market today before making a move in Commercial Properties or Investment Properties in Phoenix / Tucson / Arizona, as the market has a lot of moving parts today. What is going on socio-economically, what is going on demographically, what is going on with location, with competing businesses, with public policy in general — all of these things affect the quality of selling or purchasing your Commercial Properties, Commercial Investment Properties and Commercial and large tracts of Residential Land in Phoenix / Tucson / Arizona.  Therefore, you need a broker, a CCIM (Certified Commercial Investment Member) who is a recognized expert in the commercial and investment real estate industry and who understands Commercial Properties and Investment Properties.

I am marketing my listings on Costar, Loop-net CCIM, Kasten Long Commercial Group.  I also sold  hundreds millions of dollars’ worth of  Investment Properties / Owner User Properties in Retail, Office Industrial, Multi-family and Land in Arizona and therefore I am working with  brokers, Investors and Developers. I am also a CCIM and through this origination ( ) I have access to marketing not only in the United States, but also international.  Click here to find out what is a CCIM:



Reasons to Consider me for Commercial Referrals – I have the Knowledge and Experience                                                                                                                 


Click here to View My Listings and Profile


Click here to find out what is a CCIM:


Click here to view my website:


Interactive Map Of All 10+ Unit Apartment Listings in Metro Phoenix


Interactive  Metro Phoenix Map of New Apartment Construction by Completion Status


Click her to join my mailing list :


AZREIA Market Update | March 2016



Walter Unger CCIM –   – 1-520-975-5207  –

2016 Official Arizona Visitors Guide

Visit Arizona

Why Phoenix?  This is a very interesting article, you should read it, amazing, there were only 350 K people living in Phoenix in 1950



Timeline of Phoenix, Arizona history,_Arizona_history


Phoenix, Arizona,_Arizona



Facts of Arizona – year 1848 to 2013

Feel free to contact Walter regarding any of these stories, the current market, distressed commercial real estate opportunities and needs, your property or your Investment Needs for Comercial Properties in Phoenix, Tucson, Arizona.

  • 1-520-975-5207

Check out my professional profile and connect with me on LinkedIn.

Follow me on Facebook:


Follow me on Twitter:

Follow Me on Google+


  1. Interactive Map Of All 10+ Unit Apartment Listings in Metro Phoenix


  1. Interactive  Metro Phoenix Map of New Apartment Construction by Completion Status



Kasten Long Commercial Group tracks all advertised apartment communities, including those advertised by other brokerages.  The interactive map  shows the location of each community (10+ units) and each location is color coded by the size (number of total units). 

Click here for Map of Apartments for Sale (10+units)



Walter Unger CCIM, CCSS, CCLS

I am a successful Commercial / Investment Real Estate Broker in Arizona now for 20 years.  If you have any questions about Commercial / Investment Properties in Phoenix or Commercial /  Investment Properties in Arizona,  I will gladly sit down with you and share my expertise and my professional opinion with you. I am also in this to make money therefore it will be a win-win situation for all of us. 


Please reply by e-mail or call me on my cell 520-975-5207


Walter Unger CCIM

Senior Associate Broker 

Kasten Long Commercial Group

2821 E. Camelback Rd. Suite 600

Phoenix , AZ 85016

Direct:    520-975-5207   

Fax:       602-865-7461

View My Listings and Profile

Join My Mailing List

What is a CCIM?

Reasons to Consider me for Commercial Referrals



Delivering the New Standard of Excellence in Commercial Real Estate 

  • Commercial Real Estate Scottsdale
  • Commercial Real Estate Phoenix
  • Commercial Real Estate Arizona
  • Commercial Investment Properties Phoenix
  • Commercial Investment Properties Scottsdale
  • Commercial Investment Properties Arizona
  • Land Specialist Arizona
  • Arizona Land Specialist
  • Land Specialist Phoenix
  • Phoenix Land Specialist
  • Land For Sale Phoenix
  • Land for sale Arizona
  • Commercial Properties For Sale Phoenix
  • Commercial Real Estate Sales Phoenix
  • Commercial Properties Phoenix
  • Commercial Properties Arizona
  • Commercial Land Specialist Phoenix
  • Commercial Land Phoenix
  • Multifamily land Phoenix
  • Retail Land Phoenix
  • Industrial Land Phoenix
  • Land Commercial Phoenix
  • Land Retail Phoenix
  • Land Industrial Phoenix
  • Land Multifamily Phoenix
  • Industrial Land for sale Phoenix
  • Land Industrial
  • P
  • Investment Real Estate


Disclaimer of Liability

The information in this blog-newsletter is for general guidance only, and does not constitute the provision of legal advice, tax advice, accounting services, investment advice, or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal, or other competent advisers. Before making any decision or taking any action, you should consult a professional adviser who has been provided with all pertinent facts relevant to your particular situation. Tax articles in this e-newsletter are not intended to be used, and cannot be used by any taxpayer, for the purpose of avoiding accuracy-related penalties that may be imposed on the taxpayer. The information is provided “as is,” with no assurance or guarantee of completeness, accuracy, or timeliness of the information, and without warranty of any kind, express or implied, including but not limited to warranties of performance, merchantability, and fitness for a particular purpose.