In the midst of ICSC's RECon, the retail real estate industry's largest deal making event, statistics continue to support the relationship between retail sales and the demand for industrial real estate. That being said, local growth remains tepid. However, as always, national trends and cycles will come to impact the Tucson market.
Retail sales continue to climb in the U.S. finishing first quarter with $1.15 trillion of total sales according to Moody’s/Economy.com. This marks the eighth consecutive quarter of retail sales growth. Kiplinger expects overall retail sales to increase by a bit more than 3% this year, compared with a 2010 gain of over 4% from the dismal 2009 levels.
Reflecting these improvements, retailers and 3PLs continue to lease more space to keep up with demand and industrial leasing activity totaled 68.0 million square feet in the first three months of 2011, up 12.5% from this time last year. With improved demand, overall vacancy rate has been on a downward trend since the beginning of 2010 and is down to 10.2%, from 10.8% a year ago.
As noted in today's Commercial Property Executive story summarizing retail market sentiment at RECon, the economy has hit bottom, "but the rising tide has yet to lift all boats."
Other industry leaders providing timely updates from RECon include David Bodamer of Retail Traffic, Commercial Source/NAR, GlobeSt's Trend Czar, Jonathan Miller, JLL, and TheRealDeal NY. Look also for blog posts from brokers and industry folks pounding the floor, including Duke Long. PICOR's own Greg Furrier and Rob Tomlinson are at RECon. Expect a future post with their insights.
To talk to one of PICOR's retail or industrial specialists about Tucson market conditions and the climate for leasing and investment, visit our website or call us at 520.748.7100.
Barbi Reuter, RPA oversees PICOR’s operations, research, finance and new media activities, liaises with the global services platform provided through the Cushman & Wakefield Alliance, and serves as Associate Broker. One of 13 company Principals, she is active in industry and community leadership, through such organizations as Commercial Real Estate Women (CREW), Greater Tucson Leadership, Arizona Town Hall, and board work for the Tucson Girls Chorus and PICOR Charitable Foundation.
Data source: C&W Research, Moody's/Economy.com