October 28, 2011—Inside Tucson real estate & construction

By: Roger Yohem
INSIDE TUCSON BUSINESS
October 28, 2011

Tucson commercial real estate news, excerpted from Inside Tucson Business’ full column:

Apartments improve

If conditions hold, the multi-family sector in Tucson will record its best year since 2008. Although not a blockbuster performance by any means, apartments appear headed to a net absorption of about 1 percent for 2011.

“Citywide vacancies, which stood at 9.4 percent at the end of the first quarter, dropped to 9.1 percent for the third quarter. This is the lowest vacancy rate since the 2008 first quarter,” said Bob Kaplan, a principal and apartment specialist with PICOR Commercial Real Estate Services.

Over the past three years, 2008 ended at about 11 percent vacancy, 2009 ended at about 12 percent, and 2010 was at about 10 percent. The 2011 third quarter had a positive absorption of 941 units.

Retail rolling

The region’s retail real estate sector continued a tedious progress toward stabilization during the third quarter, posting positive absorption of about 47,000 square feet.

“As pent-up demand and stabilizing rental rates continue to converge, positive absorption should continue in the Tucson retail market,” said Greg Furrier, a principal with PICOR Commercial Real Estate Services. “With the holiday season approaching, the sector expects to see a stronger fourth quarter than 2010 and end the year with healthy positive absorption.”

Year-to-date, absorption is a positive 226,000 square feet for a vacancy rate of 8.7 percent. Although the second quarter vacancy mark was 8.6 percent, some 100,000 square feet of new space was delivered to the market since then. Basically, new leases have kept pace with new construction, Furrier said.

The expansion of QuikTrip into the Tucson market now includes 12 sites. Paradise Bakery & Café opened during the quarter and is planning another location. Skechers entered the market re-purposing a vacated video store and Verizon Wireless increased its presence in the market with a new location near the University of Arizona campus.