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. The pendulum has moved to center in a balanced landlord/tenant market. Concessions are minimal and pressure is occurring on lease rates in some submarkets, particularly in the northwest, where rents have increased 10.0% to 15.0% over the last 18 months. The strongest part of the market is in the 5,000- to 10,000-SF range, with the preponderance of activity in that size level. Spaces over 50,000 SF still suffer from limited demand.Read More
PICOR Connect | Trends in Commercial Real Estate
Positive momentum accelerated in the Tucson industrial market during the second quarter, with vacancy improving to 8.6% on positive net absorption of 252,815 square feet (SF). After peaking at 13.4% 3Q 2011, market-wide vacancy improved to its lowest post-recession level, not reporting a sub-9.0% rate since 2008. Many projects reached full occupancy, with multi-tenant inventory inconsistently available. Of note given its nearly two million SF footprint, the UA Tech Park saw activity bringing its vacancy down to 2.0%.Read More
Rent or mortgage payments are likely among the top expense line items in operating your business, right up there with staffing costs. Not only is the direct cost relevant, but also your choice of location and space layout has the potential to impact the productivity of your team, as well as the perception of your brand by customers and clients. With that in mind, let’s explore some key considerations that come into play when choosing a business location.Read More
Last year proved to be a challenging year globally: the slowdown suffered by the China economy, falling of oil prices and the expectation of raising rates by the FED caused pressure on world markets. Mexico was not the exception.Read More
We were recently invited to speak at the Southern Arizona CCIM 2016 Commercial Real Estate Forecast. This event focuses on all aspects of Commercial and Multi Family real estate in Tucson, Arizona and brings together market leaders to speak on the various commercial real estate disciplines. Various market specialists share their expertise and perspectives on the general health and advancement, or decline, of the commercial real estate sectors. For 2016, industrial can be referenced as being in a state of advancement, unlike the eight years preceding it.Read More
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
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.