PICOR Connect | Trends in Commercial Real Estate

Tucson Apartment Market Gains Ground Q3

Posted on Tue, Dec 15, 2015

Market Overview

In a show of local market strength, Tucson’s multifamily sector reported positive growth in all key statistical categories in the third quarter of 2015. Absorption increased by 623 units during this time period as students and winter visitors returned to the region. For the trailing twelve months, Metropolitan Tucson experienced a 740-unit increase in occupancy. The net rents for the Tucson market increased $9 per unit to an average rent of $651 per unit and $0.89 per sf (without utilities) in Metropolitan Tucson. Of note, this represented the largest rental gain in a single quarter since 2006. Gross rents have increased $15 per unit (2.36%) over the last year with the largest gross rental gain occurring in the Tucson Mountain Foothills ($44 per unit).  The greatest one-year decline was from the South Central Tucson market ($21 per unit). The leading indicators of absorption and net rents typically signal a strengthening market. The vacancy rate for conventionally-operated complexes improved 0.72% to an average of an 8.17% vacancy. Seasonal improvement is predicted most third quarters but the meaningful gains in each of these sectors is a true step in the right direction.  The sentiment among management companies as a whole is more positive on the growth and immediate future of the multi-family market.  As Tucson continues to add jobs in the marketplace, we will continue to see positive results in all the main sectors.

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Topics: Tucson, Commercial real estate, Investment property, Vacancy, Apartments, Multifamily

The Mixed Story on the Tucson Apartment Market

Posted on Thu, Feb 26, 2015

Metro Tucson ended November with a total of 372,000 non-farm jobs, gaining 5,200 year-over-year (YOY), an annualized job growth rate of 1.4%. Growth in home prices began to flatten, with a 4.6% gain in median selling price in 2014. HomeGoods, a division of TJM Companies, announced interest in opening a western distribution center in Tucson, an operation employing up to 900 with an estimated economic impact of nearly $900 million. HomeGoods received Pima County approval and awaits a tax incentive decision from the City of Tucson in February.

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Topics: Tucson, Housing, Commercial real estate, Investment property, Absorption, Vacancy, Apartments, Multifamily

Tucson's apartment market sees gains in Q3

Posted on Tue, Nov 11, 2014

For the Tucson apartment market, the third quarter of 2014 continued to report historic progress in absorption and vacancy figures.  Tucson's multifamily inventory absorbed 618 units in the third quarter of the year. The vacancy rate dropped 0.8% to a very encouraging 8.2%.  These two indicators continue to improve in the marketplace mainly due to the declining average rent in Tucson. 

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Topics: Tucson, Commercial real estate, Investment property, Absorption, Market trends, Vacancy, Apartments, Multifamily

Tucson: A Hotbed for Apartment Investors | Q2 Market Snapshot

Posted on Tue, Aug 26, 2014

The second quarter of 2014 saw historic progress in absorption and vacancy figures. 235 units were absorbed in the second quarter of the year with the largest gain in South Central Tucson. Downtown Tucson had all the buzz, and many prospective residents were looking for properties within this submarket. The overall vacancy rate dropped 0.28% to a very encouraging 9.05% at the year’s midway point. The net rents for the Tucson market continued to stay flat with no gain over the last six months. Tucson sales were averaging $639 per unit and $0.86 per sf (without utilities) in Metropolitan Tucson. The highest average rent was found in the Oro Valley/Catalina submarket at an average of $838 per unit. The lowest average rent of $512 per unit was found in the South Tucson/Airport area.

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Topics: Tucson, Housing, Commercial real estate, Investment property, Absorption, Vacancy, Apartments, Multifamily

Market Minute: Briefs on the Tucson Commercial Real Estate Markets

Posted on Thu, Jul 31, 2014

The unemployment rate for the Tucson metro area as of May 31st was 5.8%, 60 basis points (bps) lower than year end and 50 bps below the national rate. Decreased government spending impacted both Tucson’s market momentum and activity. Home prices and inventory flattened in the second quarter, while the inventory of Tucson residential listings increased.

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Topics: Tucson, Industrial, Commercial real estate, Economic development, Investment property, Absorption, Market trends, Vacancy, Lease rates, Leasing, Office, Medical office, Apartments, Multifamily

Steady as she goes: Tucson's apartment market continues modest improvement

Posted on Wed, May 28, 2014

The Tucson apartment market has been remarkably steady for the past few years with occupancy remaining in the 90% to 91% range and rents slowly edging higher. Rental concessions have also continued to improve modestly, helping to boost property operating incomes.

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Topics: Tucson, Commercial real estate, Absorption, Market trends, Vacancy, Apartments, Multifamily

Tucson Apartment Market Snapshot

Posted on Tue, Feb 25, 2014

Read the latest recap of the Tucson multifamily market from our team, as well as commentary from our friends at Reis, Inc. on the data set they track for the Tucson apartment market. A link to our full report can be found at the end of the article.

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Topics: Tucson, Commercial real estate, Investment property, Market trends, Vacancy, Apartments, Multifamily

Tucson Multifamily: Student Housing & Class A Construction Lead the News

Posted on Wed, Nov 13, 2013

Operating fundamentals continued to slowly improve in Tucson with modest decreases in vacancy, positive absorption, a small increase in rental rates and some continued decline in rental concessions. Average vacancy dropped from 9.4% to 9.3% and the average rental rate essentially held steady, averaging $635. In a continuation of a four-year trend, higher occupancies and stronger increases in rental rates occurred in submarkets with higher-grade properties. The Northwest, Catalina Foothills, and Northeast submarkets, which have the strongest demographics in the region, had the lowest submarket vacancies in Tucson.

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Topics: Tucson, Housing, Commercial real estate, Investment property, Absorption, Market trends, Vacancy, Development, Construction, Apartments, Multifamily

Tucson's Multifamily Renaissance | TREND Report

Posted on Thu, Aug 22, 2013

The Tucson apartment market is experiencing a renaissance with active and innovative development in the sector after a decade of underinvestment. During the housing boom of 2000 to 2008 the economics of multifamily development allowed few new developments in Tucson. Due to low apartment rental rates, high cost of land and building materials, very few multifamily developments penciled out in Tucson during the past decade. Lower land and building costs, a weak home market, higher demand for quality multifamily housing and some key rezoning actions have brought on a flurry of new construction.

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Topics: Commercial real estate, Community, Market trends, Apartments, Multifamily

Property Tax: Managing real estate ownership expenses in Arizona

Posted on Wed, Feb 06, 2013

Property taxes are one of the main expenses of real estate ownership in Arizona. In today’s business climate, taxes are under the microscope more than ever as property owners and managers seek ways to reduce expenses. We are fortunate that Arizona has a tax valuation appeal system. The system allows property owners or their agents to file an appeal petition for review with the purpose of lowering property tax. 

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Topics: Tucson, Industrial, Commercial real estate, Investment property, Office, Retail, Medical office, Multifamily