The Tucson industrial market reported the strongest small tenant activity in recent years, with small startups and smaller company expansions comprising the bulk of first quarter activity. A heart-beat was palpable for larger requirements in the 10,000 to 50,000 square foot (sf) range, though few leases were executed by quarter’s end. Autobahn Indoor Speedway signed the largest lease first quarter, following in the entertainment sector that has enjoyed growth in recent quarters. Slight negative absorption of 28,363 sf in the first quarter ticked overall market vacancy up to 9.6%, with direct vacancy (which excludes available sublease space) ending at 8.7%. Overall average asking rates remained steady, though rates were up about 5.0% year-over-year. Slight increases in effective rents were recorded in the Northwest submarket due to tighter supply.Read More
PICOR Connect | Trends in Commercial Real Estate
With 4,700 jobs gained over the first eleven months of 2015, Tucson's employment picture continued to under-perform relative to the state and nation, primarily due to fiscal drag. Tucson has recovered 74.0% of recessionary jobs lost, while Greater Phoenix has recovered 101.0%. Sector performance varied, with positive gains in professional and business services; leisure and hospitality, education and health care; financial activities; and information were largely offset by reductions in the other sectors, with the largest declines in state and local government.Read More
While not enjoying job recovery on pace with the national average, metro Tucson added 3,300 jobs year-over-year through August. Educational/Health Services and Professional/ Business Services accounted for 78.8% of the job growth, with unemployment improving significantly to 5.3% by September.
As we entered the second quarter of 2015, key drivers for the Tucson industrial market included logistics and call centers, with the mining industry preparing for the next wave.
Tucson’s unemployment rate dropped 0.3 percentage point to 5.6% in February, considered close to full employment. That being said, the slow pace of job growth remained of primary concern and impeded stronger market progress.
Rob Glaser, CCIM, SIOR, Principal at Cushman & Wakefield | PICOR credited as the mastermind behind this real estate assemblage told us when he first heard of the requirement it was just his intuition that told him Tucson would be an ideal place for the company.
Each year since its 2005 Tucson commercial real estate market entry, Costar, the leading provider of industry market intelligence, has tracked and awarded the highest-producing companies and individuals in the Tucson marketplace.
Metro Tucson ended November with a total of 372,000 non-farm jobs, gaining 5,200 jobs year-over-year (YOY), an annualized job growth rate of 1.4%. Personal income rose 2.7% locally over a year earlier. HomeGoods, a division of TJX Companies, announced intent to open its western distribution center in Tucson, a proposed 800,000-square-foot (sf) facility with an estimated economic impact of nearly $900 million. HomeGoods received Pima County approval and awaits a tax incentive decision from the City in February. The real estate is being brokered in part by Cushman & Wakefield | PICOR.
On December 25, 2014, Cushman & Wakefield | PICOR lost the most colorful block from our metaphorical quilt. Peter Douglas was a founding Principal whose cowboy nature guided a career of client and community impact. He was a founder of Greater Tucson Leadership and was inducted into the YMCA Hall of Fame in which he served on the Board for several years, and as Chairman. He was a dynamic force and presence in our firm and the loss is great.
With an improving national economic and employment picture slowly lifting all boats, the Arizona and Tucson employment rates followed suit; statewide employment was up 2.1% over a year ago. Residential inventory continued to stabilize and median sale prices gained 6.2% over prior year. Shared Services Center’s expansion announcement netting 200 new jobs made a positive statement about Tucson as a location to service western states.
Overall, we remain confident that consumers will continue to increase spending at a healthy clip, which will boost the need for both retail and industrial space int he coming year.