Tucson Market Review 2011/2012 Forecast
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Transcript of Tucson Market Review 2011/2012 Forecast
2011 Market Review
Office
Retail
Industrial
Market Review
Market Review
■The great (expectation) reset
■Shift from uncertainty to stability
–Housing
–Consumer spending
–Rates/occupancy
■Corporate consolidations
■Broad dynamics with local impact
–Jobs
–Deficits at all levels
–Infrastructure needs
■Community assets
■Tourism as driver
Tucson Construction Completions
479
485 650
423
129
245
1,4
43
820
1864
467
424
358
411
518
1,8
71
445
51
143
2006 2007 2008 2009 2010 2011
Th
ou
san
d S
F
Office Retail Industrial
Source: CoStar
Vacancy
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
2006 2007 2008 2009 2010 2011
Office Retail Industrial
Source: CoStar
Asking Rents
$0.00
$5.00
$10.00
$15.00
$20.00
$25.00
2006 2007 2008 2009 2010 2011
Office Retail Industrial
Source: CoStar
Office
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
$12.00
$13.00
$14.00
$15.00
$16.00
$17.00
$18.00
$19.00
$20.00
$21.00
$22.00
2007 2008 2009 2010 2011
psf/
yr
OVERALL GROSS RENT OVERALL VACANCY RATE
Source: CoStar
Office
■2011
–Improving fundamentals
–Increased lease activity year end
–Limping sale market
–Stable medical office market
■2012
–Bright future downtown
–Office demise? Footprint change = opp
–Pent up demand remodel/cap upgrades
–Grant Rd relocations/redevelopment
Retail
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
$0.00
$5.00
$10.00
$15.00
$20.00
$25.00
2007 2008 2009 2010 2011
psf/
yr
OVERALL RENT VACANCY RATE
Source: CoStar
Retail
Retail
■2011
–Strong finish (spending, improvements, auto)
–Positive absorption (376K)
–Development/redevelopment traction
–Active competition for location/corners
■2012
–Bricks/mortar demise? (change/opp)
–Benefit from improving housing market
–Stabilized rates
–Continued flight to quality
–Increased investor activity
Industrial
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
$0.00
$0.20
$0.40
$0.60
$0.80
$1.00
2007 2008 2009 2010 2011
psf/
mo
OVERALL NET RENTAL RATE OVERALL VACANCY RATE
Source: CoStar
Industrial
■2011
–Corporate consolidations
–Increased economic development activity
–Tale of 3 lease markets
–Sales dominated by distress
■2012
–Large Vacancies = opportunity
–Logistics & “Reshoring”
–Mining support
–Construction supply survivors
Summary
■Where are the opportunities?
■How will proximity to Mexico support growth &
opportunity?
■When will the windows close/pendulum shift?
Resources
■Resources
– www.picor.com
@PICORcres
– PICOR
– PICOR
– PICOR Connect: Trends in Commercial Real
Estate (blog.picor.com)