California investors are driving transaction volumes in Arizona during the pandemic. California investors typically account for 30% to 40% of transaction volumes in the market, but recently, that number has increased to 50%. While the pandemic has impacted all markets, California investors continue to flock to business friendly markets, like California.

"We attribute this recent surge to a widening disparity in business climate in Arizona versus California," Ari Spiro, founding principal of Orion Investment Real Estate, tells GlobeSt.com. "Increased concern of regulation and taxation on investment properties is causing concern and Arizona's historic pro-business environment has proven to be attractive to businesses relocating here as well as investment capital."

Phoenix has many attractive qualities, including population and job growth, but it is also a natural investment market for California capital. "One of Arizona's biggest investment attractions is its proximity to Southern California," says Spiro. "Being only an hour flight from LAX to Phoenix, investors find Arizona assets to be manageable from a logistical standpoint. Couple that with Arizona making daily headlines of attracting corporate headquarters, distribution centers, healthcare, and technology firms makes Arizona an obvious choice for investment capital looking to diversify geographically out of the California market."