Like Forrest Gump and Jenny, or peas and carrots, commercial real estate and the economy enjoy a special relationship. Thus at Cushman & Wakefield | PICOR, we introduce our quarterly commercial real estate update with an economic backdrop to inform our perspective.
Read MoreTopics: Tucson, Industrial, Economy, Investment property, Absorption, Market trends, Vacancy, Office, Retail, Multifamily
The Tucson industrial market remained strong at midyear, as evidenced by our primary metric: Vacancy rate. Once again, vacancy has ticked-down, this time to 5.1%. Echoing the comments last quarter, Tucson is experiencing a “plateau effect” in the industrial sector in that the dynamic run-up in absorption slowed as the market leveled off at a highly-occupied equilibrium.
Read MoreTopics: Tucson, Industrial, Economy, Commercial real estate, Absorption, Market trends, Vacancy, Lease rates, Warehouse, Leasing, Manufacturing
The vacancy rate of conventionally-operated, stabilized units increased 0.17% from last quarter to 6.1%. The University submarket had the lowest vacancy of any submarket at 3.7%. South Central Tucson, Southeast Tucson, and Pantano/Lakeside were the only three submarkets to record vacancies over 7.0%, with vacancies of 8.3%, 7.7% and 7.0% respectively. Five of the 15 submarkets experienced improved vacancy, with Tucson Mountain Foothills leading the way with a vacancy reduction of 2.0%.
Read MoreTopics: Tucson, Economy, Housing, Commercial real estate, Absorption, Market trends, Vacancy, Leasing, Apartments, Multifamily
Positive momentum continued its five-year trend in 2018 in the Tucson industrial market, with vacancy improving to 5.7%, cut in half from its highest point in recent years. At year end, vacancy was lowest in the city center at 1.5% and highest in the Southwest/Airport area at 12.8%. Net absorption was 50.4% stronger than in 2017, and thanks to Amazon’s two projects, space under construction has quadrupled year over year. Significantly, Amazon is entering the market with an 850,000 square foot (sf) distribution center under construction in the southeast sector and a new 50,000 sf service center in the southwest.
Read MoreTopics: Tucson, Industrial, Economy, Commercial real estate, Economic development, Market trends, Vacancy, Lease rates, Logistics, Manufacturing
Tucson retail vacancy improved dramatically in the first quarter of 2018, dropping from 6.0% to 5.6%. This may have led to an increase in average asking lease rates compared to last quarter. Rates averaged $15.05 per square foot (psf) versus $14.87 psf at year end 2017.
Read MoreTopics: Tucson, Economy, Commercial real estate, Investment property, Absorption, Vacancy, Lease rates, Leasing, Retail
The industrial market in Tucson has largely arrived at an equilibrium in lease negotiations between landlords and tenants. Vacancy experienced a slight uptick in the past two consecutive quarters, but this is viewed as a natural ebb-and-flow as tenants move around our market, rather than an indication of concern.
Read MoreTopics: Tucson, Industrial, Commercial real estate, Investment property, Vacancy, Leasing, Manufacturing
Topics: Tucson, Economy, Commercial real estate, Vacancy, Leasing, Apartments, Multifamily
With accelerating improvement in vacancy from 9.2% to 7.8% year-over-year, Tucson’s industrial market reported the strongest annual gain since 2006 and the lowest vacancy mark since Q3 2008. With occupancy above 92% and no speculative space under construction, the market will experience upward movement in rents. Rent pressure has already occurred for spaces 5,000 square feet (SF) and under. Net absorption for 2016 nearly doubled that recorded in 2015 at nearly 1.5 million square feet (MSF). Absorption over the past twelve months exceeded all years since 2006’s high of 1.9 MSF.
Read MoreTopics: Tucson, Industrial, Economy, Commercial real estate, Economic development, Vacancy, Warehouse, Leasing, Logistics, Manufacturing
Tucson’s retail market ended 2016 with a 6.4% vacancy, the same as year-end 2015, supported by a healthy market with positive growth in retail sales. With the exception of 2013, positive net absorption of 386,786 square feet (SF) for the year exceeded the total for each year since 2007. Gross absorption was also at a three-year high.
Read MoreTopics: Tucson, Economy, Commercial real estate, Vacancy, Lease rates, Leasing, Retail
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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