PICOR Connect | Trends in Commercial Real Estate

The Comcast Deal - A "Broken Promise:" TREND Report

Posted on Thu, Oct 15, 2015

Comcast Cable recently signed a lease for the former American Home Furnishings building near the Tucson Mall for its new IT, call center and social media operations. The company announced its plans to add 1,125 jobs in May. With an annual payroll of $35 million, the facility will be staffed by IT and customer-support workers. The center will house Spanish-speaking employees specializing in social media so customers can connect with Comcast via Twitter, Facebook or other outlets.  One of the major decision factors for selection of the Tucson Galleria site was based upon the convenient commuting options to the building. 

About The Building

The Tucson Galleria building at 4690 N. Oracle Road was constructed in the mid-1980’s as a multi-tenant retail mall property, and is adjacent to the Tucson Mall.  From 1992 until 2008, it was occupied by American Home Furnishings, a New Mexico- based company founded in the 1930’s and still operating in Albuquerque, Farmington and Santa Fe. The building is 211,152 square feet and includes a multi- level parking garage with approximately 1,000 covered parking spaces.  A covered parking garage is especially important during hot Tucson summers.

The multi-million dollar renovation being done now will bring the building up to modern standards which will include significant energy reduction measures. The interior buildout will consist of product training labs, training rooms, video conference facilities, cafeteria, movie theaters, and a fitness center.

4690 N Oracle Comcast Tucson

Neighborhood Amenities

In their RFP, Comcast requested a list of amenities within a three-mile radius of the building.  This list was to include restaurants, public transit facilities, public parks/recreation facilities, retail stores, car dealers, and other amenities that Comcast employees might enjoy having nearby.  We reviewed an aerial map and began listing the amenities within the first half mile radius. We had pages filled with amenities! At this point we knew we could deliver an impressive list amenities within the first half-mile radius. We had pages filled with amenities! At this point, we knew we could deliver an impressive list of amenitie just within a half-mile and that list would be on the extreme side of impressive to Comcast.

In addition to the vast a list of restaurants, the adjacent Tucson Mall created an air-conditioned environment that would allow Comcast employees to take an indoor walk during the heat of the summer. The transportation amenities are unparalleled in the Tucson Mall area. A pathway system adjacent to the property called The Loop connects non-motorized pedestrian paths in Tucson to the Rillito, Santa Cruz, and the Pantano River Park.  The Tucson Loop currently totals 100-plus miles and links Marana, Oro Valley and Metropolitan Tucson to its parks, trails, and bus and bike routes.  Another important transportation amenity was the Tohono O’Odham Sun Tran Transit hub which is located just east of the Tucson Mall, within a short walk to the Comcast building. Employees can get to and from the building from every area of Tucson with ease. 

Healthy Environment
During my past 30 years in commercial real estate, I have noticed one characteristic of a top-notch site selector; they always wear their poker face, sometimes for months while they are negotiating for their company. As I was standing on the top deck of the 1,000 space parking garage and looking at the Catalina Mountains with the Comcast site selector, I pointed east to the Tohono O’Odham transit center. I also pointed out the pathway along the river and I explained the Rillito River Parkway, “The Loop” is a 100 mile pathway system which allows users to access virtually any area of Tucson by foot or bicycle.  The site selector began to ask dozens of questions about the path; which had triggered an interest both personally and on behalf of Comcast. I explained you could ride mountain bike through the desert from many locations, such as the Westin La Paloma resort and connect to the Rillito River Park, never using a public street. Taking a run during lunch hour, or walking at the fully air-conditioned Tucson Mall is an ideal scenario for many Tucsonans. Based on the strong desire of Comcast to encourage a healthy lifestyle for their employees, I knew they would be impressed with the many surrounding resources our building had which would promote an active and healthy lifestyle.  

We understood our building had the strongest location in the city when compared to the competing properties, which were mostly located in the Industrial submarkets throughout Tucson. However, as industrial space rates are lower than retail space, we knew the competition was priced lower. Based on competitive costs, we knew our amenities were our advantage. We were right.

Supports our Community

“It means a direct economic impact of $35 million to our economy. It means more than 1,000 quality jobs for Tucson.”  This is a direct quote from Governor Doug Ducey from his press conference from his office in May. Comcast’s impact on our community is significant. This could put Southern Arizona on the map as a location for additional new businesses.   

Broken Promise

Comcast requested a list of amenities for their employees within 3 miles. We broke our promise, we could not list the hundreds upon hundreds of amenities within a 3 mile radius of our building without using dozens of pages of paper to create the list. We took a chance and listed the major amenities within ½ mile (walking distance) of our building. Comcast admitted (after the Lease was signed!) our site was absolutely at the top of the list of best locations they had ever leased in the country.

Comcast was a tough negotiator and there are not many landlords that have the ability to invest the capital needed for a Comcast transaction. The building owner, the Tanager Company had the desire and the ability to make the multi-million dollar investment required to make the Comcast deal.  The Tanager Company knew it was becoming a partner with Comcast in creating a unique work environment for 1,000 employees and are very honored to be involved.

Special thanks to Jim Sadler of JLL for his assistance with this transaction.

Greg Furrier picorGreg Furrier has been active in commercial real estate since 1985. He joined Cushman & Wakefield | PICOR in 1996 after ten years with CB Commercial, CBRE's predecessor, as a retail sales and leasing specialist. He focuses on landlord and tenant representation and can be reached at gfurrier@picor.com.  

 

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Topics: Tucson, Commercial real estate, Economic development, Leasing, Office