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.
PICOR Connect | Trends in Commercial Real Estate
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.
Nogales, Ariz. is witnessing increased demand for international trade warehouse space and property with the upcoming $244 million expansion of the Mariposa Port of Entry. The Nogales Santa Cruz Port Authority works with key stakeholders in the Nogales community, including commercial land developers and Realtors®, to enhance economic development in the Nogales-Santa Cruz County region.
For the sake of ending on a positive note, let's do the good, the bad, and the ugly in reverse for this mid-year Tucson industrial market overview:
The national economy picked up in demand following the extreme winter. While statewide job gains are expected to outpace the nation in 2014, post-recession job recovery locally has lagged, leaving job creation the most pressing demand driver. March unemployment in Tucson was 6.6%, which was under both the state’s rate of 7.3% and the U.S.
With Tucson and Arizona post-recession job recovery lagging the nation, the Tucson industrial market sneaked in progress throughout 2013 in bite-sized increments, fueled by the health of startups and other small businesses. Available buildings over 100,000 square feet (sf) were the market’s enduring opportunity, while market drivers included activity in the mining sector and refocus on trade and logistics.
You might know Mexico is a country with just over 116 million people according, to the estimate made last July. It has 31 States and the Federal District, known as Mexico City. About a year ago, the PRI party got back in power after 12 years of the PAN party being in power. Since then, a lot of good things have happened as a country in different areas such as education, telecommunication, security, energy and more reforms that are currently under negotiation. Without going into much detail, as this article’s intent is to address more of the real estate industry, there is no doubt that Mexico is moving forward and the progress will benefit all of us in Tucson, Arizona and more broadly.
Arizona job growth outpaced the national rate as the state continued to recover. Statewide improvement in job gains was primarily found in the Phoenix metropolitan area, with only 1,300 new jobs in the Tucson region since July 2012. According to Forbes magazine and Moody’s Analytics, Arizona ranks No. 1 nationally for projected job growth over the next five years, forecasted to increase 3.0% with an annual economic growth of 4.6%. The housing recovery statewide positively impacted construction jobs in both Phoenix and Tucson, but permits remained low, relative to historic norms. Conventional lending is recovering and inventory remained below the balance point at 3.5 months while finished lot supply is scarce.
Arizona job growth outpaced the nation since hitting bottom in fall 2010, but is still digging out of the significant hole left by job losses during the downturn. Much of the growth focused on Phoenix while Tucson’s progress was less robust. Local unemployment rates continued to improve ending May at 6.3%, a full percentage-point improvement since January 2013. Retail sales in the metro area increased 2.1% year over year and May home sales rose with median prices up 12.0% and closings up 11.0%, both over May 2012.
In the realm of supply chain services, as with any growth-oriented product or service, constant innovation is a critical component to differentiate and create distance from the competition.