By: Elliott D. Pollack & Company, The Monday Morning Quarterback

(December 20, 2022) Prices rose less than expected in November, the latest sign that the runaway inflation that has been gripping the economy is beginning to loosen up. The consumer price index, which measures a wide basket of goods and services, rose just 0.1% from the previous month, and increased 7.1% from a year ago, the Labor Department reported. Economists surveyed by Dow Jones had been expecting a 0.3% monthly increase and a 7.3% 12-month rate.

The increase from a year ago, while well above the Federal Reserve’s 2% target for a healthy inflation level, was tied for the lowest since November 2021. Excluding volatile food and energy prices, so-called core CPI rose 0.2% on the month and 6% on an annual basis.

Despite the news, the Fed increased interest rates again by 0.50% last week. The target range is now 4.25%-4.5%. The benchmark interest rate now stands at a 15-year high and the Fed signaled plans to continue lifting rates through the spring. The Fed has increased rates at the fastest pace since the 1980s to cool the economy and bring down inflation which is running near a 40-year high.

November retail sales fell 0.6% from the prior month for the biggest decline this year according to the Commerce Department. Budget-conscious shoppers pulled back sharply on holiday-related purchases, home projects and autos. Manufacturing output declined 0.6%, the first drop since June, the Fed said in a separate report. Households appear to be planning for a difficult year ahead and the possibility of a recession.

U.S. stock losses deepened Thursday as investors digested the Fed’s rate plans. However, while the economy has shown signs of slowing, the labor market remains tight despite layoffs in sectors such as tech and real estate. Jobless claims fell by 20,000 to a seasonally adjusted 211,000 last week. Claims are up from lows this spring but remain at levels that suggest many employers are holding tight to workers.

U.S. Industrial Production
A report released by the Federal Reserve on Thursday unexpectedly showed a modest decrease in U.S. industrial production in the month of November. A 0.6% drop in manufacturing output included declines in consumer goods and business equipment products, contributing to a 0.2% drop in overall industrial production, the Fed said. Economists had expected industrial production to inch up by 0.1%.

Meanwhile, a 3.6% spike in utilities output helped limit the downside amid unseasonably cold weather across much of the country

“The 0.6% drop in manufacturing output last month matches the already-reported decline in retail sales and provides further evidence that the economy has lost some serious momentum,” said Andrew Hunter, Senior U.S. Economist at Capital Economics.

He added, “With weak global growth and the strong dollar compounding the domestic drag from higher interest rates, we suspect this weakness is a sign of things to come.”

The Fed also said capacity utilization in the industrial sector dipped to 79.7% in November from 79.9% in October. Economists had expected capacity utilization to edge down to 79.8%.

Capacity utilization in the manufacturing and mining sectors fell to 78.9% and 88.2%, respectively, while capacity utilization in the utilities sector rose to 74.4%.

U.S. Snapshot:

• Core-inflation growth slowed from 6.3% to 6.0%. Core-inflation has slowed from its peak in the summer but remains well above the 2.0% target.
• Retail sales declined by 0.6% in November. While sales were 6.5% above a year ago, consumers pulled back in electronics, clothing, and sporting goods.
• Industrial production fell for the second consecutive month in November. The index now sits at 104.5, up from 102.1 in January 2022. The index has been very erratic this year with monthly declines in 5 of the last 7 months. Even with the 0.2% monthly decline, the index was up 2.5% from a year ago.

• Arizona added 32,300 jobs in November. The majority of gains were in Trade, Transportation & Utilities (12,500), Government (6,100) and Education & Health Services (5,900). Year-over-year, the state has added 111,500 jobs. Greater Phoenix and Greater Tucson added 22,500 and 5,800, respectively.
• The unemployment rate fell across the state and its major metros. Arizona’s dropped to 4.1% while Greater Phoenix dropped to 3.0% and Greater Tucson 3.4%.

SCOTTSDALE, AZ (December 20, 2022) – ORION Investment Real Estate (ORION) welcomes Garrett Hemeyer
and Colt Siler as Senior Associates to its growing roster. Garrett and Colt bring several years of combined experience in land and multifamily real estate. They have an established track record of transactions while providing clients with detailed financial projections and creative acquisition strategies.

“Part of our mission at ORION is to nurture young talent. Garrett and Colt are rising stars in this industry, and we’re excited to support them with all the tools in our toolkit,” said Ari Spiro, ORION’s resident.

Garrett and Colt met while working on land deals at City to City in Phoenix. There, Garrett started as an apprentice and quickly ascended through the ranks to become a licensed real estate agent with several listings to his name. Colt joined City to City in 2021, after graduating Magna Cum Laude from Arizona State University’s W.P. Carey School of Business with a B.A. in Finance. At City to City, he guided clients throughout entitlement and development processes before expanding to the existing asset side of investment sales.

Drawn to the faster pace of multifamily real estate, Colt and Garrett left City to City to form a business partnership focused on that space. After hearing positive feedback about ORION and meeting its agents and founders, they joined the brokerage.

“ORION gives us incredible marketing support to find deals and pitch them far and wide,” Garrett says. “We’ve already learned so much here and have set our sights on picking up our first investment property,” adds Colt.

“Colt and Garrett bring financial acumen and unfailing optimism about Arizona’s real estate market. We’re excited to see what they accomplish as part of the ORION team,” said Sean Stutzman, Principal at ORION.

PHOTO: Garrett Hemeyer (left) and Colt Siler (right)

TUCSON, ARIZONA, December 19, 2022 — Highlighted this week is an industrial lease for 8,000 square feet at 2055 E 17th Street in  Tucson to Livestream Shopping, handled by Paul Hooker, SIOR, with Cushman & Wakefield | PICOR and Joseph Castillo with Volk Company.

The following leases were submitted to the Real Estate Daily News from December 12-16, 2022.

INDUSTRIAL – 2055 E 17^th ST., TUCSON 85719, Central
Livestream Shopping, Inc. leased 8,000 square feet of industrial space at 2055 E. 17th St., in Tucson, from R2 Ewaste, LLC. Paul Hooker, SIOR, Principal, Industrial Specialist with Cushman & Wakefield | PICOR, represented the landlord in this transaction. Joseph Castillo with Volk Company, represented the tenant.

INDUSTRIAL – 3820 S PALO VERDE RD., TUCSON 85714, South
Kealii Molina and Simon Frohnsdorff, dba Hawaii All-Stars Arizona, leased 5,587 square feet of industrial space at Palo Verde Business Center, 3820 S. Palo Verde Rd., Suite 108 in Tucson, from Pegasus Tucson Owner LLC.  Industrial Specialists with Cushman & Wakefield | PICOR handled this transaction. Paul Hooker, SIOR, Principal, and Andrew Keim represented the landlord. Alex Demeroutis, and Jesse Blum represented the tenant.

OFFICE – 5151 E BROADWAY BLVD., TUCSON 85711, East
Securitas Security Services USA, Inc. leased a 3,351-square-foot office at 5151 E. Broadway Blvd., Suite 410 in Tucson. Thomas J. Nieman and Richard M. Kleiner, MBA, Principals and Office Specialists with Cushman & Wakefield | PICOR, represented the landlord, Tucson 5151 Investments, LLC. Bruce Suppes with CBRE, Tucson, represented the tenant

RETAIL – 6383 E GRANT RD., TUCSON 85715, Northeast
Love Beauty Bar, LLC has leased 1,991 sf at 6383 E Grant Rd Suite 135, in Tucson, AZ. Love Beauty Bar will operate as a hair and beauty salon. Larsen Baker now manages and handles the leasing for the 6383 E Grant retail building located on Grant east of Wilmot. The building has two other suites available for lease. Isaac Figueroa with Larsen Baker represented the Landlord and handled this transaction.

OFFICE – 310 S WILLIAMS BLVD., TUCSON 85711, East
Proper Villains expanded their lease for an additional 1,577 square feet of office space at Williams Centre, 310 S. Williams Blvd., Suite 310 in Tucson, from DHS Property Investments, Ltd. Partnership. Ryan McGregor, and Thomas J. Nieman, Principal, Office Specialists with Cushman & Wakefield | PICOR, represented the landlord in this transaction.

RETAIL – 260 E CONGRESS ST., TUCSON 85701, Central
Le Macaron franchisee, Happy Cookie, LLC, has signed a lease for 1,358 square feet at 260 E. Congress Street, Tucson, AZ, located near the southeast corner of Congress Street and Arizona Avenue in Downtown Tucson. The new French pastry shop will sell its signature macarons and will include other items such as gourmet chocolates, French gelato, classic French pastries, European style beverages and food items and French gifts. Le Macaron has over 60 locations Nationwide with many new shops opening soon. This will be the first Le Macron in Arizona. The new pasty shop is expected to open late summer of 2023. Craig Finfrock of Commercial Retail Advisors, LLC, represented the Tenant, Happy Cookie, LLC, and the Landlord, Tucson5C Hotel, LLC, represented itself in this transaction

INDUSTRIAL – 2450 W RUTHRAUFF RD., TUCSON 85705, Central
Vacasa Arizona LLC leased 1,100 square feet of industrial space, at Ruthrauff Commerce Center, 2450 W. Ruthrauff Rd., Suite 198 in Tucson, from Pegasus Tucson Owner LLC. Paul Hooker, SIOR, Principal, and Andrew Keim, Industrial Specialists with Cushman & Wakefield | PICOR, represented the landlord in this transaction. Bruce Suppes and Diane Carlson with CBRE, Tucson, represented the tenant.

INDUSTRIAL – 1870 W PRINCE RD., 85705, Central
American Print Company LLC leased 920 square feet of industrial space at Exchange Place Business Center, 1870 W. Prince Rd., Suite E-49 in Tucson, from Pegasus Tucson Owner LLC. Paul Hooker, SIOR, Principal, and Andrew Keim, Industrial Specialists with Cushman & Wakefield | PICOR, represented the landlord in this transaction.

Submit sales and leases to [email protected]