PICOR Connect | Trends in Commercial Real Estate
With accelerating improvement in vacancy from 9.2% to 7.8% year-over-year, Tucson’s industrial market reported the strongest annual gain since 2006 and the lowest vacancy mark since Q3 2008. With occupancy above 92% and no speculative space under construction, the market will experience upward movement in rents. Rent pressure has already occurred for spaces 5,000 square feet (SF) and under. Net absorption for 2016 nearly doubled that recorded in 2015 at nearly 1.5 million square feet (MSF). Absorption over the past twelve months exceeded all years since 2006’s high of 1.9 MSF.Read More
Tucson’s retail market ended 2016 with a 6.4% vacancy, the same as year-end 2015, supported by a healthy market with positive growth in retail sales. With the exception of 2013, positive net absorption of 386,786 square feet (SF) for the year exceeded the total for each year since 2007. Gross absorption was also at a three-year high.Read More
In a 2014 Tucson Metro Chamber survey of local business executives called the Business Expansion and Retention (BEAR) Report, the Chamber learned that the interface between the City of Tucson and the private sector needed some refinement so it could operate more smoothly and help more job creators open their doors.Read More
There is a powerful chapter in the bestselling book Good to Great that describes an amazing phenomenon called the flywheel effect. In the context of the book, the flywheel effect is the relentless and steady achievement of small things that lead to long term achievement of great things.
When you were a kid you might have played with a real flywheel called a gyroscope. It’s a heavy wheel connected to an axis (axel) and spun like toy top. Once spinning the gyroscope kept spinning until friction ultimately reduced its RPMs to a point where it lost momentum, began to wobble and ultimately fell over at a dead stop.
Tucson’s apartment market experienced positive growth in all of the market indicators from the previous quarter. The vacancy rate for stabilized units improved by 0.56% from the previous quarter to a rate of 6.27%.
Anchored centers in Tucson continued their long-standing success, and well-positioned projects like Park Place Mall trade area’s Wilmot Plaza reported some of the strongest rents and lease-ups in recent years. Tucson's southwest submarket posted continued strong demand from retailers, entertainment venues, and restaurants.Read More
Tucson’s industrial vacancy continued its positive trajectory, improving by 50 basis points over Q2 2016 to end at 8.1%, the lowest level recorded since Q4 2008. With the completion of HomeGoods’ 858,288-square-foot (SF) distribution center, total net absorption to date in 2016 exceeded 1.2 million square feet (MSF), marking the first year over one MSF since 2006.Read More
As a result of steady, organic recovery and job growth, surplus and sublease office space in the Tucson market has largely shaken out. Overall market vacancy hovered around 12.0% for six solid years. At its current 11.5%, Tucson office vacancy is at the lowest point since Q4 2009. The data reveal a strong differential between older and newer buildings, with those built prior to the new millennium sitting at 13.9% vacant, and those built since 2000 enjoying a much healthier 6.0% vacancy. Absorption for the year is on pace to exceed the prior two years, standing at 289,278 square feet (SF) through the end of Q3.Read More
Mid-year Tucson office market metrics were on a positive path. Positive year-to-date absorption of 205,301 square feet (SF) brought overall market vacancy down to 11.8%, nearly half a point below the historical average which skewed up in the recession. Existing and new call center requirements were present in the Tucson office market, as well as interest for medical, behavioral health and ancillary health care uses.Read More