Tucson Market Review 2011/2012 Forecast
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![Page 1: Tucson Market Review 2011/2012 Forecast](https://reader034.fdocuments.in/reader034/viewer/2022051411/5455c2f9af7959755d8b4a32/html5/thumbnails/1.jpg)
2011 Market Review
Office
Retail
Industrial
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Market Review
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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
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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
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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
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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
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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
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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
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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
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Retail
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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
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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
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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
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Summary
■Where are the opportunities?
■How will proximity to Mexico support growth &
opportunity?
■When will the windows close/pendulum shift?
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Resources
■Resources
– www.picor.com
@PICORcres
– PICOR
– PICOR
– PICOR Connect: Trends in Commercial Real
Estate (blog.picor.com)