Two recent releases from CoStar, the primary commercial property data source for Tucson office market data, indicate improvement in the Tucson office market at year end 2011, consistent with PICOR’s own year end report and forecast. PICOR office specialists handled 6 of the top 10 office leases of the quarter, according to CoStar research.
Market Trend: Tucson’s Office Vacancy Decreases to 12.0%
The Tucson Office market ended the fourth quarter 2011 with a vacancy rate of 12.0%.
The vacancy rate was down over the previous quarter, with net absorption totaling positive 229,757 square feet in the fourth quarter. Vacant sublease space increased in the quarter, ending the quarter at 72,311 square feet.
The largest lease signings occurring in 2011 included the 49,543-square-foot lease signed by Afni, Inc. at 5451 E Williams Blvd in the Central market, and the 26,000-square-foot deal signed by Monument Healthcare at 603 N Wilmot Rd in the Central market.
Rental rates ended the fourth quarter at $18.94, an increase over the previous quarter.
A total of two buildings delivered to the market in the quarter totaling 172,450 square feet, with 98,005 square feet still under construction at the end of the quarter.
This trend is compared to the U.S. national office vacancy rate, which decreased to 12.3% from the previous quarter, with net absorption positive 21.73 million square feet in the fourth quarter.
Tucson’s Select Top Office Leases for Q4 2011
The following is an account of the Tucson market’s top 10 select office lease transactions for fourth quarter 2011.
Arizona Dept. of Economic Security leased 25,998 square feet at 800 E Wetmore Road in Tucson. David Montijo of CBRE represented the landlord, Floating Island Investments LLC.
Pima Federal Credit Union leased 13,996 square feet in Casas Adobes Corporate Park in Tucson. John Yarborough and David Carroll of Romano Real Estate represented the landlord in-house.
Kimley-Horn & Associates, Inc. leased 7,955 square feet at 333 E Wetmore Road in Tucson. Rick Kleiner of PICOR Commercial Real Estate Services represented the landlord, Pearlmark Real Estate Partners.
Compass Behavioral Health Care renewed its lease for the entire 7,142-square-foot medical building in St. Mary’s Medical Offices at 1779 S Saint Mary’s Road in Tucson. Rick Kleiner and Tom Knox of PICOR Commercial Real Estate Services represented the landlord, St. Mary’s Hospital & Health Care Center.
KEPCO signed a three-year deal for 6,354 square feet in Cambric Corporate Center at 1880 E River Road in Tucson. Howard Kong of Grubb & Ellis represented the tenant. Colleen Pettit of The Colton Company represented the landlord in-house.
Counseling & Consulting Services renewed its space for the entire 6,000-square-foot medical building at 2430 E 6th St. in Tucson. Rick Kleiner of PICOR Commercial Real Estate Services represented the landlords, David R. & Luz Harvey.
The Innova Group leased the entire 5,405-square-foot property in Village Offices at 3196 N Swan Road in Tucson. PICOR Commercial Real Estate Services represented both sides of the transaction. Thomas Nieman represented the tenant, while Tom Knox represented the landlord, Venture West Group, Inc.
Parsons Dooley Stephan, CPAs leased the entire 5,333-square-foot building at 2033 E Grant Road in Tucson. Ian Stuart of CBRE represented the landlord, JPD2033 LLC.
AXA Advisors renewed its 5,075-square-foot lease on the 12th floor at 5151 E Broadway Blvd. in Tucson. William Hartman of Cushman & Wakefield, Inc. represented the tenant. Thomas Nieman of PICOR Commercial Real Estate Services represented the landlord, Seldin Real Estate, Inc.
Cohen Ophthalmology leased 3,159 square feet in San Rafael Medical Center at 6524-6528 E Carondelet Drive in Tucson. Lanny Colton of Colton & Company represented the tenant. Thomas Nieman and Russ Hall of PICOR Commercial Real Estate Services represented the landlord, St. Joseph’s Family Practice Associates.
The information in this news report is based on CoStar’s Fourth Quarter 2011 Market Report, a 40+ page comprehensive research report available to CoStar subscribers. To learn more about quarterly research reports and other benefits available to CoStar subscribers, please call 888-226-7404.