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 MoreTopics: Tucson, Economy, Commercial real estate, Investment property, Leasing, Office, Medical office
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 MoreTopics: Tucson, Industrial, Economy, Commercial real estate, Investment property, Warehouse, Leasing
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 MoreTopics: Tucson, Industrial, Commercial real estate, Investment property, Leasing, Logistics, Office, Retail, Medical office
Tucson’s multifamily market experienced minimal change from the previous quarter. The vacancy rate for stabilized units in Tucson increased 2 basis points from the previous quarter to a rate of 6.83%. This figure is very encouraging, given the seasonal nature of the Tucson apartment rental market. Many residents leave for the summer, escaping extreme heat, along with many students returning home. This is the lowest second quarter vacancy rate reported since 2006. Absorption decreased 29 units over the second quarter.
Read MoreTopics: Tucson, Economy, Housing, Commercial real estate, Investment property, Leasing, Apartments, Multifamily
The restaurant industry is a significant contributor to the national economy and its importance has been increasing over decades. According to the National Restaurant Association (NRA), the restaurant industry contributes 4% of the national Gross Domestic Product. The NRA also reports that the restaurant industry accounted for 25% of the total food dollar in 1955 and this increased to 47% of the national food dollar by 2016. Restaurant industry growth in real dollars is charted in the table below.
Read MoreTopics: Tucson, Commercial real estate, Investment property, Market trends, Retail
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 MoreTopics: Tucson, Industrial, Sonora Mexico, Land, Commercial real estate, Investment property, Warehouse, Manufacturing
No better news could have been reported for the Tucson apartment market than job growth, which translated into the strongest improvement in fundamentals in years. The vacancy rate for stabilized units in Tucson dropped 100 basis points (bp) from the previous quarter to 6.8%. This is the lowest first quarter rate since 2007. North Tucson, comprising Northeast Tucson (3.8%) and Oro Valley/Catalina (4.7%) reported the lowest vacancy rates. The University area experienced a 520 bps increase in vacancy, ending the quarter at 11.9%. One area of concern in this submarket is the potential of overbuilding in the student housing sector. In addition, older units, especially those in outlying areas, are losing ground in the form of lease-up and rents to newer units.
Read MoreTopics: Tucson, Commercial real estate, Investment property, Apartments, Multifamily
Vacancy in the Tucson retail market remained at 6.6% in the first quarter, in line with the stability reported over a two-year span. Comparing year-over-year Q1 net absorption, the delta represented 139.0% more space absorbed in Q1 2016 than was lost in Q1 2015.
Read MoreTopics: Tucson, Commercial real estate, Investment property, Leasing, Retail
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 MoreTopics: Tucson, Industrial, Commercial real estate, Investment property, Market trends, Warehouse, Leasing
Preliminary BLS data reported that Metro Tucson added 12,999 jobs year-over-year through February 2016, with total employment of 455,754 and an unemployment rate of 4.8%. These results demonstrate significant positive progress for the Tucson labor market. If preliminary figures hold, this level of employment would represent a record and the lowest rate of unemployment since April 2008.
Read MoreTopics: Tucson, Commercial real estate, Market trends, Vacancy, Lease rates, Office, Medical office
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