The following commercial leases were reported to the Real Estate Daily News for the Tucson Lease Report from January 26 thru 30, 2015.

OFFICE – 2424 N. WYATT DR., TUCSON, AZ
TMC One leased 11,603-square-feet at 2424 N. Wyatt Dr. in Tucson from TMC Holdings, Inc. TMC One is TMC’s physician practice group, formerly known as Saguaro Physicians Group. The new lease results in consolidations of several locations and will provide improved facilities and services for patients and economies for administration of the practice. 2424 N. Wyatt, the former site of the Tucson Orthhopaedic Institute, is being re-tenanted with TMC One and Genesis OB/GYN and offers additional space of approximately 12,000 square feet for a future tenant. The on-campus building also provides an adjacent dedicated parking garage. Rick Kleiner, MBA, and Tom Knox, SIOR, Office Specialists with Cushman & Wakefield | PICOR, handled this transaction. [mepr-show rules=”58038″]Askign lease rate: $28.00 SF/YR Full Service[/mepr-show]

INDUSTRIAL – 1790 W. SAHUARO DRIVE, TUCSON, AZ
Underground Construction Co. has leased 7,853-square-feet of industrial space at 1790 W. Sahuaro Drive in Tucson. The tenant was represented by Tim Healy and Bob DeLaney with CBRE Tucson, along with Matt Dickson with CBRE Houston. The landlord, South Central Industrial Properties V LP, was represented by Dean Cotlow with Cotlow Company of Tucson

RETAIL – 2002 S CRAYCROFT RD, TUCSON, AZ
Omega Construction Services, LLC leased 5,400-square-feet in Cashbox Plaza at 2002 S. Craycroft Rd. in Tucson from Premier Video, Inc. Rob Tomlinson, Retail Specialist with Cushman & Wakefield | PICOR, represented the landlord in this transaction.
[mepr-show rules=”58038″]Tenant Phone: 520.300.5918[/mepr-show]

RETAIL – 7960 N ORACLE RD, TUCSON, AZ
La Posada Holding Co. has leased 3,650-square-feet of retail space at Plaza Escondida Shopping Center located at 7960-7966 N. Oracle Rd. in Tucson. The tenant was represented by David Montijo and Damian Wilkinson with CBRE’s Tucson office. The landlord, Roseville Tucson LLC, was represented by Pete Villaescusa and Jesse Peron also with CBRE’s Tucson office.

OFFICE – 6436 E. BROADWAY BLVD., TUCSON, AZ
Nickolas Orton Insurance has leased 2,975-square-feet of office space at 6436 E. Broadway Blvd. in Tucson. The tenant was represented by Bruce Suppes with CBRE’s Tucson office. The landlord, Capital Source Financial, LLC, was represented by Aubrey Finklestein with Vast Commercial Real Estate Services in Tucson. [mepr-show rules=”58038″]Phone: 800.865.7898[/mepr-show]

INDUSTRIAL – 2750 S. 4th AVE., SOUTH TUCSON, AZ
Casa de los Niño’s has leased a 2,886-square-feet space at Madera Business Park, located at 2750 S. 4th Avenue, in South Tucson. The Premises will be used as administrative offices. They are scheduled to open for business April 2015. Andy Seleznov, CCIM, Director of Leasing at Larsen Baker represented the Landlord. [mepr-show rules=”58038″]Tenant Phone: 520.881.1292[/mepr-show]

INDUSTRIAL – 2440 W. RUTHRAUFF RD., TUCSON, AZ
Ace Industrial Supply, Inc. leased 2,800-square-feet at 2440 W. Ruthrauff Rd., Suite 120 in Tucson from Presson Scottsdale, LLC. Rob Glaser, SIOR, CCIM, Industrial Specialist with Cushman & Wakefield | PICOR, handled the transaction. [mepr-show rules=”58038″]$0.69 SF/MO Modified Gross; Tenant Phone: 520.795.8800[/mepr-show]

OFFICE – 6628 E. CARONDOLET DRIVE, TUCSON, AZ
Community Medical Services has leased 1,650-square-feet of medical office space at 6628 E. Carondolet Drive in Tucson. The tenant was represented by Bruce Suppes with CBRE Tucson and Chris Ackel with CBRE Phoenix. The landlord, Team Anasazi, LLC, was represented by Tari Auletta and Doug Richardson with Tucson Realty & Trust.

RETAIL – 4444 E. GRANT RD., TUCSON, AZ
Community Provider of Enrichment Services leased 1,554-square-feet in Cashbox Plaza in Tucson at 4444 E. Grant, Suite 116 from Kolvoord Family Limited Partnership. Rob Tomlinson, Retail Specialist with Cushman & Wakefield | PICOR, represented the landlord in this transaction. [mepr-show rules=”58038″]Asking lease rate: $10.00 SF/YR NNN; Tenant Phone: 520.884.7954[/mepr-show]

RETAIL – 2801 E. SPEEDWAY BLVD., TUCSON, AZ
Blake’s Lotaburger has leased a 2,520-square-foot, freestanding retail property located at 2801 E. Speedway in Tucson. The former Arby’s property will mark the first Arizona location for the New Mexico-based burger concept. Pete Villaescusa and Jesse Peron with CBRE’s Tucson office negotiated the transaction on behalf of both the tenant and the landlord.

RETAIL – 5420 E. BROADWAY BLVD., TUCSON, AZ
Miracle Ear has leased a 1,120-square-feet space at The Plaza at Williams Centre, located on the SWC Broadway Blvd and Craycroft Rd. The Premises will be used as a retail store for the sales of hearing aids and other related auditory products. They are scheduled to open for business June 2015. Andy Seleznov and Melissa Lal represented the Landlord, Larsen Baker, while Dave Dutson, of CBRE in Tucson, represented the Tenant. [mepr-show rules=”58038″]Tenant Phone: 713.696.7592 (Corporate)[/mepr-show]

OFFICE – 7604 N. LA CHOLLA BLVD., TUCSON, AZ
Arizona Biomedical Services has leased 1,050-square-feet of office space at La Cholla Corporate Center located at 7604 N. La Cholla Blvd. in Tucson. The landlord, TJ Bednar & Co., was represented by Bruce Suppes with CBRE’s Tucson office. [mepr-show rules=”58038″]Asking lease rate: $21.00 SF/YR Full Service;  Tenant Phone: 520.327.2027[/mepr-show]

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The following leases were reported to the Real Estate Daily News for the Phoenix Lease Report January 26 – 30, 2015.

RETAIL – 1912 E. CAMELBACK RD., Phoenix, AZ.
A lease for 2,800-square-feet at 1912 E. Camelback Road in Phoenix between 2nd Wind Exercise Equipment and Pacific Camelback Inc. was completed in December.  Jake Ertle of Rein & Grossoehme Commercial Real Estate represented the Tenant in the transaction.

RETAIL – 13370 W. VAN BUREN ST., PHOENIX, AZ.
A lease for 1,120-square-feet in Central Square Shopping Center to Prime Placement SEO was recently consummated. The location of the property is 13370 W. Van Buren St., in Goodyear, AZ. Richard Mackay of Rein & Grossoehme represented the owner and the tenant.

RETAIL – NWC 51^st AVE. & OLIVE, GLENDALE, AZ.
A lease for 910-square-feet at NWC 51st Ave & Olive in Glendale between Boost Mobile & North American Development was completed in December.  Jake Ertle and Jim Edwards of Rein & Grossoehme Commercial Real Estate represented the landlord and Geoff Lang with Keyser represented the tenant.

RETAIL – SWC of THUNDERBIRD RD. & 35^th AVE., PHOENIX, AZ.
A lease for 900-square-feet at Thunderbird Square on the SWC of Thunderbird Rd & 35th Ave in Phoenix, AZ to E Cig Wave was recently consummated. The owner of the center is B.H. Chapman, LLC. Jared Lively of Rein & Grossoehme represented the Tenant and the Landlord on this transaction.

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By: Terry Lavery, CCIM, Investment Specialist at Tucson Realty & Trust

Since the early 1990’s, Tucson Realty & Trust Co. Commercial Real Estate forecasts have produced an overview of the Tucson Commercial Real Estate Market. This overview has highlighted major transactions in the marketplace, short-term risk and returns, market velocity, institutional investment activity, and significant tax changes. One key topic that needs to be discussed is “Why invest in Tucson versus the other cities in the United States?”.

In the fourth quarter of 2014, a large panel of national buyers with a proven record of performance in large asset acquisition discussed this topic in Los Angeles. This panel discussion focused on investment and opportunity in secondary and tertiary markets. Of the 300 market- places in the U.S. deemed to be primary, there were only six which were considered due to safety, return, and uniquely diversified for long-term institutional ownership. These six were New York, Chicago, Boston, Washington DC, Miami, and Los Angeles. The second tier consisted of 294 remaining metro areas of which the next six were selected. These were Dallas, Atlanta, San Francisco, Seattle, Houston and the hotly contested final chosen area. The last mentioned finalists chosen include Denver, Phoenix, Austin, Charlotte, and Northern New Jersey. Unique opportunities were growth cities such as Nashville. Quandary cities such as Detroit and Cleveland were excluded due to population migration or bankruptcy. Nationally, Tucson is on the map, but under the radar.

Tucson is a tertiary market for national real estate investment.   Our apartments for national investors must be 200 units or greater and our office leases longer up to 7 – 10 years. Our industrial product must be cutting edge with growing job creators with credit quality. The age of our available inventory must be less than 10 years old.

Most importantly, our local government must be pro-business for users of commercial space. Our region has great amenities, but generally lacks safety for long-term investment. Last, we as part of this State of Arizona must cheer any out-of-state employer moving to Arizona as it legitimizes the state as a place to invest. The more velocity and volume we generate, the better our economy. As a city, Tucson must be prepared to facilitate and encourage new employment opportunities.

The current national market is poised for growth. Consumers are spending, GDP is stronger, and growth in fixed investment is growing. Dropping oil prices have benefited all consumers and business operations. Low inflation and interest rates have encouraged economic development. Our U.S. economy is slowly coming back, although Tucson is lagging well behind. It’s all about jobs.

Investment opportunities in Tucson remain mainly with Class A large investments or locations, such as the 2014 sales of El Con, the MDA Building and 4400 E. Broadway. This may continue in 2015 as cap rates are at their best from a seller’s perspective and interest rates for purchasing at bottom levels. Together these bring excellent conditions to sell. Expect more trophy sales as sellers harvest and buyers take advantage of lower rates.

In addition, you will continue to see small apartment transactions continue along with some residential land to builders to replenish low lot stock.

In conclusion, our Tucson marketplace is under performing as a national real estate investment opportunity with sales mainly attributed to trophy properties. The boom bust economy in the past decade has shocked investors. Less hurdles and incentives to enter southern Arizona must be a priority to compete for job growth compared to other metro areas.