Cushman & Wakefield | Picor reports as a result of steady, organic recovery and job growth, surplus and sublease office space in the Tucson market has largely shaken out. Overall market vacancy hovered around 12.0% for six solid years. At its current 11.5%, Tucson office vacancy is at the lowest point since Q4 2009. The data reveals a strong differential between older and newer buildings, with those built prior to the new millennium sitting at 13.9% vacant, and those built since 2000 enjoying a much healthier 6.0% vacancy. Absorption for the year is on pace to exceed the prior two years, standing at 289,278 square feet (SF) through the end of Q3.

Sales activity in 2016 has not been for the faint of heart. Pricing, cap rates, financing and valuations have varied widely, primarily due to disparate motivations. The distressed seller would accept almost any price, while at the other extreme, some buyers pay a premium for that “right” property or investment.  Prices paid by users varied widely, often for similar properties in the same development. Cap rates ranged from the low 6% to the high 10% range.

Tower cranes are active across the market with office, health-care, and hospitality projects well underway. Specific to office, buildings are under construction for the Girl Scouts on Broadway, at Puente Nuevo on Ft. Lowell and Marana Health Center in Dove Mountain. With a segment of the office stock functionally obsolete, many older properties may be destined for demolition, consistent with the trend toward desirability of newer spaces.

ECONOMY
Greater Tucson was recently named the third fastest-growing metro area over 500,000 population by Bloomberg, with July year-over-year job growth of 4.2% in July, 2016 and total employment of 378,050. The national housing recovery has improved Tucson’s prospects for population growth and is expected to spur construction. Arizona was the only state in the U. S. to experience month-over-month construction job gains in July 2016, and was one of three states to report year-over-year growth. Nationally, September consumer confidence was at the highest level since 2007.

OUTLOOK
Tucson is gaining attention for all the right reasons, on the heels of recognition as a top city for millennials. The food scene has garnered national acclaim after being named the U. S.’s only UNESCO City of Gastronomy. Three Tucson schools were ranked in the top 25 by U.S. News & World Reports. Tucson’s existing businesses, both large and small, have been quietly growing headcounts and have arguably accounted for the Tucson region’s path to vibrancy over 24 months. Recent hiring and growth announcements will add future positive impact. Planned hiring by Caterpillar (600 jobs), Worldview (448), ADP (400), C3 (1,132), Samsung SmartThings (80), and Tucson Medical Center (61) combine for a forecasted economic impact of over $3 billion. And other announcements have occurred, with more expected. The momentum is palpable, and the outlook is extremely positive for Southern Arizona.

To read full report click here.

PHOENIX, AZ — Grab your office chairs and hockey sticks and get ready for the reintroduction of Goodmans Chair Hockey Tournament, hosted by Goodmans Interior Structures and produced by Rooted in Good, Inc., an Arizona 501(c)3 operated by Goodmans employees. This year’s event benefits First Place® AZ, a local non-profit working hard to ensure that housing options for people with autism and other special abilities are as bountiful as they are for anyone else.

Filled with good people, good times and a great impact, the spirited chair hockey event is being held at 5:30 p.m., Thursday, October 20, at the Goodmans Showroom, 1400 E. Indian School in Phoenix. While competitive teams are by invitation only, hundreds of people are expected to come and cheer on their favorite of the 16 real estate industry rivals which include architects, interior designers, general contractors and commercial real estate brokers. Competitive professionals will playfully show off their creative moves and athletic skills while seated in Herman Miller office chairs.

“Every month since our last chair hockey tournament in 2006, someone has asked me when chair hockey is coming back,” said Adam Goodman, president and CEO of Goodmans Interior Structures and also a member of the First Place AZ Capital Campaign Cabinet. “Well, it’s back! Now Goodmans is helping SARRC’s sister organization First Place, benefiting the same children from 10 years ago who are now transitioning to adulthood.”

Through the collection of tournaments from 2002 -2006, Goodmans donated more than $75,000 to the Southwest Autism Research & Resource Center (SARRC). October 20^th will be one large Throwback Thursday. Proceeds are benefiting the First Place capital campaign, now underway, that supports First Place-Phoenix, a new residential property being developed at 3^rd Street and Catalina, in the heart of the city.

“We scored big, thanks to Goodmans Interior Structures and our friends throughout the real estate community who have made our progress possible, generously committing their time, talent, resources and can-do, will-do, gotta-do spirit!” said Denise D. Resnik, First Place AZ founder and president/CEO, and SARRC co-founder.

This year’s key Chair Hockey sponsors include Herman Miller, Wells Fargo and Henry & Horne.

The concept of chair hockey is similar to ice hockey, except in chair hockey, all players are seated in ergonomic, award-winning Herman Miller Aeron chairs. The games are played in three, four-minute periods with a rubber puck and wooden hockey sticks in a rink enclosed by cubicle walls.

WHAT: Goodmans Chair Hockey Tournament
WHEN: 5:30 – 9:00 p.m., Thursday, October 20, 2016
ADMISSION: $20, which includes dinner and the opportunity to cheer on favorite team

WHERE: Goodmans Showroom, 1400 E. Indian School Road in Phoenix (Goodmans Interior Structures showroom will undergo a complete renovation in October. After demolition and before interior construction begins, Goodmans will host the Chair Hockey Tournament in the empty shell building. Within 4 weeks of the event, the renewed showroom will be ready for it’s ribbon cutting, showcasing the speed of modern interior construction utilizing DIRTT architectural solutions. Utilizing technology, and mobile furnishings, local employees will temporarily relocate to a second Goodmans location in Phoenix or work from home throughout the construction phase, highlighting Goodmans’ approach to agile and flexible workplaces.)

Real Estate Daily News Buzz is designed to give news snippets to readers that our (yet to be award winning) editors thought you could use to start your day. They come from various business perspectives, real estate, government, the Fed, local news, and the stock markets to save you time. Here you will find the headlines and what the news buzz of the day will be.

Tuesday, the Dow Jones industrial average gained 75.54 points, or 0.4 per cent, to 18,161.94. Standard & Poor’s 500 index rose 13.10 points, or 0.6 per cent, to 2,139.60. The NASDAQ composite index added 44.01 points, or 0.9 per cent, to 5,243.84.

U.S. benchmark crude oil rose 35 cents, or 0.7 per cent, to close at $50.29 a barrel in New York. Brent crude, the international standard, gained 16 cents, or 0.3 per cent, to close at $51.68 a barrel in London. Wholesale gasoline inched up a penny to $1.51 a gallon. Heating oil was little changed at $1.57 a gallon. Natural gas rose 2 cents to $3.26 per 1,000 cubic feet.

US homebuilders’ confidence eased slightly this month after surging to the highest level in nearly a year in September. Even so, builders remain optimistic overall about sales growth in months ahead, a reflection of how steady job gains are leading more Americans to buy newly built homes. The National Association of Home Builders/Wells Fargo builder sentiment index released Tuesday fell two points this month to 63 following a reading of 65 in September. Readings above 50 indicate more builders view sales conditions as good rather than poor. The index has held above 60 the past two months after hovering at 58 earlier this year.

US consumer prices rose in September on higher oil costs — Higher energy costs fueled U.S. consumer prices in September, but overall inflation remained in check as it has for the past several years. The Labor Department said Tuesday that consumer prices increased 0.3 per cent last month. Much of that rise stemmed from energy, housing and prescription drugs. Energy costs surged 2.9 per cent in September as oil and gasoline prices rebounded from recent lows. Previous price declines still mean that gas costs 6.4 per cent less than a year ago. Inflation has stayed relatively low despite job growth that has brought more workers into the economy. Until last month, the modest levels of inflation largely came from muted oil prices and a stronger dollar. (WASHINGTON AP)

Institutional Investors Eye More Real Estate, Despite Global Uncertainty “The world’s institutional investors are continuing to up their allocations to real estate despite dropping confidence in the market. Average target allocations to real estate among investors will hit 10pc next year for the first time, according to a major new study by real estate advisory firm Hodes Weill and Cornell University, equating to more than €1 trillion. In 2016, average target allocation to real estate was 9.9pc, rising to an estimated 10.3pc next year. Over the past four years, the target has risen 100 basis points.” (The Telegraph)

Gas, Housing Drive Fastest Rise in Inflation in Months “More expensive gas and rising housing costs boosted consumer inflation in September by the largest amount in five months, keeping the Federal Reserve on the cusp of raising U.S. interest rates. The consumer price index climbed 0.3% last month, the government said Tuesday. That matched the forecast of economists polled by MarketWatch. The cost of shelter — rent, new homes and previously owned homes — rose at the fastest pace since May. Energy prices, mainly gas, also posted the biggest increase since early spring.” (MarketWatch)

Supervalu to Sell Save-a-Lot for $1.4 Billion “Minneapolis-based grocery chain Supervalu said Monday that it had reached a deal to sell grocery discount chain Save-A-Lot to a private equity investor. Onex Corp. agreed to pay $1.4 billion in cash for Save-A-Lot, which owns 472 stores and licenses naming rights and supplies another 896 locations. Supervalu, which has 3,342 stores, including the Save-A-Lot locations, said it would use the cash from the transaction to pay down debt.” (USA Today)

Miracle Mile Sale Points to Bull Strip Real Estate Market “The sale of a prominent Strip shopping mall is proof, one local real estate professional said, that the smart money is now ready to bet on resort real estate in Las Vegas. Boulevard Invest LLC, the owners of the Miracle Mile Shops at Planet Hollywood, confirmed Monday that the mall was sold to Institutional Mall Investors LLC. The sales price was not disclosed. The 500,000-square-foot complex opened in 2000 as Desert Passage and became the Miracle Mile Shops when the Aladdin was rebranded as Planet Hollywood in 2007.” (Vegas Inc.)

Apple Retail Chief Angela Arendt on Turning Stores Into Town Squares “Apple’s retail chief Angela Ahrendts has spent the past two years revamping the technology company’s retail stores, where it sells iPhones, iPads, Macs, and Watches. That’s no small business—there are nearly 500 Apple stores worldwide, and retail sales are responsible for some 18% of the company’s $233.7 billion in sales, amounting to $42 billion in yearly revenue. But Ahrendts views the company’s newly redesigned retail outlets not just as stores, but as the company’s next big products.” (Fortune)

At the Low End, Homeowners Are Even More Leveraged Than They Were During the Bubble Era “Ever since the shock of the financial crisis ebbed and buyers began to return to the housing market, one truth has dominated: mortgage lending is tight. But is it? It’s true that only the borrowers with the highest credit scores get home loans now. So much lending to people with higher credit scores and so little to those on the lower end of the spectrum has shifted the average FICO score up about 40 points since before the bubble burst. But measured in another way, lending is shockingly loose.” (MarketWatch)

How to Value Boston’s Faneuil Hall and Other Questions Fintech Could Answer “Ryan Williams surveys the room: how many people could put a price tag on this building? A few hands shoot up but most do not. ‘We are focused on making anyone an institutional investor,’ says Williams, founder and CEO of real estate investment platform Cadre. ‘Our goal is for anyone to be able to access, invest [in], understand real estate. It’s important because real estate is the single most important asset for building multi-generational wealth.’ His question, it turns out, is a bit of trick.” (Forbes)

San Francisco is Greenest U.S. Office Market in 2016 “According to the third annual Green Building Adoption Index Study by CBRE Group, Inc. and Maastricht, institutional owners of office buildings continued to pursue green building certifications in the 30 largest U.S. markets during 2015. Continuing an upward trend over the past decade, green certifications are now held by 11.8 percent of all surveyed buildings, representing 40.2 percent of all office space. Both figures are slightly above last year’s results.” (World Property Journal)

Allianz Secures Stake in Park Place Mixed-Use Campus “Allianz Group now owns a 45 percent stake in one of Orange County’s most high-profile office assets. The company acquired an interest in the Park Place office campus through local subsidiary Allianz Real Estate of America. Following the deal, Allianz joins LBA Realty and Principal Real Estate Investors in a joint venture. The Park Place mixed-use asset offers a total of 2.7 million square feet of office and retail space. Allianz’s stake concerns six assets that make up the office campus, the two towers located at 3121 and 3333 Michelson Drive, as well as the retail center.” (Commercial Property Executive)

What You Need to Know About Restrictive Use Clauses “For retail tenants and landlords alike, use and exclusive use clauses, which refer to the terms written into a lease that dictates what is and is not permitted by both parties, are a critically important part of the tenant-landlord relationship and lease negotiation process. It is also a potentially contentious subject that will not only affect a retailer’s operational specifics, but can have a profound impact on the bottom line.” (Chain Store Age)