PICOR Connect | Trends in Commercial Real Estate

Topics: Tucson, Commercial real estate, Community, Leadership

Operating fundamentals continued to slowly improve in Tucson with modest decreases in vacancy, positive absorption, a small increase in rental rates and some continued decline in rental concessions. Average vacancy dropped from 9.4% to 9.3% and the average rental rate essentially held steady, averaging $635. In a continuation of a four-year trend, higher occupancies and stronger increases in rental rates occurred in submarkets with higher-grade properties. The Northwest, Catalina Foothills, and Northeast submarkets, which have the strongest demographics in the region, had the lowest submarket vacancies in Tucson.

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Topics: Tucson, Commercial real estate, Investment property, Absorption, Market trends, Apartments, Multifamily, Vacancy, Construction, Development, Housing

Arizona job growth outpaced the national rate as the state continued to recover. Statewide improvement in job gains will have a positive effect on all Arizona markets. According to Forbes magazine and Moody’s Analytics, Arizona ranks No. 1 nationally for projected job growth over the next five years, forecasted to increase 3.0% with an annual economic growth of 4.6%. The housing recovery statewide positively impacted construction jobs in both Phoenix and Tucson, with the volume of building permits strengthening. Conventional lending is recovering, and inventory remained below the balance point at 3.5 months, while finished lot supply is scarce.

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Topics: Tucson, Commercial real estate, Retail, Investment property, Leasing, Market trends, Economic development, Vacancy, Lease rates