PICOR Connect | Trends in Commercial Real Estate

Consumer spending has been trending away from soft goods into experiences, food, and entertainment driven by post-COVIDdemand.

Throughout Q2 2022, the Tucson market remained relatively strong compared to other one million plus population markets.

During Q2, overall activity remained static despite more workers returning to the office. National companies were more likely to insist on a return to the office while local employers took more time to work alternatives.

Overall market sales volume remains strong with $68.1 million trading this quarter.

In Q2, Tucson’s post-pandemic office market began to re-center itself, as vaccinations became more widespread, and employers planned their return to office strategies. Vacancy rose to 9.5%, with an expectation it will approach 10.0% by year-end before stabilizing. Activity was strongest in the healthcare-related fields, with hospice, home health care, counseling and therapy uses most prevalent.

For investors looking for investments $20 million and under, Tucson ranked number 4 on the list of small/middle sized markets. A larger driver of the demand for multifamily in Tucson is the attractive year-over-year (YOY) average rent growth of 9.1%. The shortage of affordable and traditional housing in Tucson also fuels apartment rental demand. With construction costs tripling on certain[…]