Compared to 2010, retail property occupancy levels for 2011 were up almost 16% in PICOR's portfolio over the previous year.  The average occupancy rate for PICOR’s managed portfolio was 80%, compared to 69% in 2010. While market wide vacancy was 91.6% at year end, PICOR's role in turning around distressed and receivership properties means a lower occupancy in our portfolio; however, year over year gains in traction were significant.

The Tucson medical space market has been dynamic through the economic recession, perhaps more so than any other sector of the commercial real estate market. Recent activity has shifted from the heady days of 2003 through 2008, when the purchase of medical office buildings was all the rage, to the currently more conservative world of leasing office space.  To be sure, all activity, sale or lease, has occurred at significantly lower price levels, with prices and rents down 10 to 15% in medical properties,  albeit significantly less than declines in the market for general office space. 

Despite extensive media coverage of the Arizona–Sonora region painting a less than rosy picture, many positive things are happening in the border states.

2011 proved to be a better year for Tucson industrial property owners than the previous year.  Occupancy levels were up: The average occupancy percentage for PICOR's managed industrial portfolio of 1.5 million square feet (sf) for 2011 was 78%, up from 71% in 2010.  Property managers continue to operate their properties with a sharp eye to the bottom line, without sacrificing service levels.  Pricing from service vendors has remained constant, and we have continued to leverage PICOR's buying power in the market to benefit owners and tenants of Tucson commercial real estate.

The recessionary years in Tucson’s office market are best characterized by uncertainty and stagnation. As the sprouts of recovery begin to emerge, a sense of stability is present for the first time since 2008. That being said, it is a tentative recovery, far from robust.

A delegation of BOMA Tucson and BOMA Phoenix members represented member issues as part of Arizona BOMA Advocacy Day in Phoenix last week.  The group included Arizona BOMA President and Cushman & Wakefield | PICOR Property Manager, Mona Deane, who offers this summary of the Arizona legislative office visits.

News stories from the region this week highlight positive economic development activity impacting the commercial real estate market in Tucson. Summaries below cover hiring announcements, development and construction progress, and recent awards and rankings that demonstrate Southern Arizona's stature as a Sun Corridor growth market.

Although not yet springtime by the calendar, early March in the desert indeed feels like winter is far behind us. As with the changing seasons, hope springs eternal that the Tucson industrial market has joined other commercial real estate sectors in a deliberate climb back to health. Current activity reported by PICOR's industrial team--which lists approximately 43% of Tucson industrial space for lease--is up measurably across the board.

Each year, PICOR recognizes standout performances from its team members. These range from the easily measurable and highly competitive production awards to those less tangible awards allowing senior leadership to recognize the little things that result in making a difference for clients and the community.

Chief Economist Ken McCarthy of Cushman & Wakefield weighs in on the positive January employment numbers and the critical relevance job creation has on the health of the commercial real estate industry. Read Ken's comments below, and find links to additional research documents at the bottom of the post.