PICOR Connect | Trends in Commercial Real Estate

Supply in the Tucson industrial market remains stable, with only one new industrial project under construction. We do hear of numerous proposed industrial developments in the region with 5,000-10,000 square foot (sf) bays. We expect supply of small-bay industrial (under 5,000 sf) to remain consistent until rents grow by 35%-50%.

Barbi Reuter is among seven commercial real estate leaders elected to the CREW (Commercial Real Estate Women) Network global board of directors, serving in the capacity of President-Elect in 2021. The new leaders were introduced on Sept. 17 at the virtual 2020 CREW Network Convention.

CREW is the industry’s leading advocate for the advancement of women in commercial real estate, and Reuter will be the first Tucsonan to lead the 12,000 member organization when she serves as President in 2022.

Much has been written about the return to the office after the “Great Pandemic of 2020.” In March 2020 when millions of workers were sent home, speculation began about the “new workplace.” Many said working from home was the wave of the future and would spell the death of the office. Initial surveys showed that as many as 75% of workers wanted to work from home. With the elimination of drive-time, and being home with family, who wouldn’t? Even productivity seemed higher. Then, over time, started the little murmurs, that perhaps the office was not completely extinct. There was perhaps, still a need for the office and that workers wanted to return to the workplace. Recent workforce surveys demonstrate that the 75% want to return to the office, many of them younger, newer to the working world.

Amid the COVID-19 pandemic, more than 11,000 businesses in Arizona and 1,300 in Tucson received economic relief from the federal government. While Arizona posted one of the sharpest unemployment drops in the country in May, it increased in June from 9% to 10%. On a positive note, The University of Arizona reopened with a mixture of online and in-person classes on August 24^th, and LendingTree.com named Tucson the number one searched market for “homes for sale” during the pandemic in the U.S.

Last week, Cushman & Wakefield | PICOR principal and office properties specialist Rick Kleiner joined the Back to Business Radio Show and Podcast on KVOI, the Voice, in Tucson. Hosts Rob Davidson and Alan Miklofsky had an exchange with Rick about such topics as the impact of COVID-19 on various sectors of the Tucson commercial real estate market, including office and medical, industrial, retail and multi-family properties.

It's been a couple of weeks since we updated you on "business as unusual" at Cushman & Wakefield | PICOR. With daily changes in guidance from every level of government and deeper understanding of our responsibilities to support health at the human, property, and community levels, we have continued to flex, too.

When the going gets tough, the tough get flexible! Our resilient team of Tucson commercial brokers, property managers, and support staff are weathering these strange days with good humor and a service-first mentality.

"We face unprecedented and uncertain times because of COVID-19. However, the Chamber has been here for 123 years, and we intend to be here to lead businesses for another century. For this reason, based on available information, we emphatically believe it is in the best interests of the community, our restaurants and the employees that work in these establishments, to modify their operations to takeout and delivery only. In a meeting led by Mayor Regina Romero, including Vice-Mayor Paul Cunningham, our members, restaurateurs, Visit Tucson and the Pima County Health Department, this recommendation was strongly advocated for by the Chamber. Restaurants are regulated on having strong health and safety standards and they have been amplified during this crisis. Mayor Romero has called a Local Emergency to go in effect tonight at 8:00 p.m., to maintain public health. Dining rooms in restaurants, bars and food courts will be closed. Mayor Romero stated, “My top priority, above all else, is to protect public health. This is a painful decision that I do not take lightly. Our restaurants and small businesses need clear, uniform direction, and this order provides them exactly that.”

The retail sector has always been a dynamic arena of flux and of change. As our society and our culture has evolved and progressed, so has retail. The process of selling and the delivery of consumer goods has throughout history always progressed in order to keep pace with changes in transportation, technology, demographic shifts, and the resultant changes in consumer preferences. Today’s media is full of news of bankruptcies and store closures while simultaneously reporting year over year increased retail sales. While this may seem like a daunting and dangerous business environment this is business as usual for retailers and the industries that serve them. Retailing has always been a business and science that is constantly evolving. The current state of retailing is another evolution and stage of growth that will, inevitably, lead to the next stage of growth.

With thanks for broad individual and community support, the PICOR Charitable Foundation (“PCF”) raised and donated nearly $79,000 in its 2019 cycle, 10% more than the previous high mark. With all event costs underwritten by in-kind community partners and PICOR corporate funds, 100% of the funds raised through the 25^th Annual Pancake Feed were granted to Tucson-area youth charities. PCF is especially grateful for its capstone contributor, Burton Family Foundation, who doubled their commitment in 2019.