TUCSON, ARIZONA, February 17, 2023 – Cushman & Wakefield | PICOR is reporting fourth quarter saw the Tucson’s average vacancy rate increase 1.20% to 7.46% from the previous quarter, a 3.08% increase year over year (YOY).

To read the full report on Tucson’s multifamily activity in Q4, click here.

The Tucson market’s occupancy declined correspondingly by 520 units, while the average gross apartment rent without utilities decreased $8 (.69%) from Q3 2022 to $1,157 per unit/$1.53 per square foot (sf). In reviewing transactions for properties with 40 or more units in consecutive quarters, the average price per unit increased by a dramatic $57,893 per unit and $11.83 per sf to a total of $250,944 per unit and $293.23 per sf.

The end of 2022 saw a decline and slowdown in the rental market. Units being marketed at pre-adjustment rental numbers are slow to lease. This softening in rents results from the market changes and renters exercising caution financially to not stretch outside of their means. In surveying local managers, many cite Q4 as the slowest leasing quarter in Tucson since 2019. Units which would previously have leased within days are now taking weeks or months to lease. The City of Tucson is still working to fill the need to place affordable housing tenants. Subsidized rents are only slightly below market rents with the goal of enticing owners and managers to fill vacancies with lower income tenants. Going forward in 2023 and beyond, Tucson will likely experience softer YOY rent increases than in recent years.

Supply and Demand in the Tucson MSA has completely flipped from the beginning of 2022. Owners who had pricing expectations based on property values in the first half of the year have had to adjust to the new reality if they wish to move their product in this market. For multiple reasons, Q4 2022 saw considerably fewer transactions than in previous quarters. First, interest rates for commercial apartment building investment have increased nearly 300 basis points in a 12-month window. Second, softening in the rental market has caused more cautious underwriting and projections by buyers when evaluating deals. Third, each year, regardless of the market’s strength, a seasonal slowdown is experienced during the holidays. In 2023, the market will likely cool and require closing the gap between seller’s expectations and purchasers’ willingness to pay.

Full report here.

Tucson (Vail), Arizona, February 16, 2023 — DR Horton finished a rolling option agreement with this second and final takedown for 52 SFR lots at Sycamore Vista in the Vail area of Tucson for $3.729 million.

The total 128 lots were purchased under agreement for $71,000 per finished in an agreement that began June 2022. This last transaction occurred January 11, 2023.

The new phase of Sycamore Vista is near the base of the Santa Rita mountains. Its location is just around the corner from Corona Foothills Middle School, Sycamore Elementary School and Copper Ridge Elementary School in the highly sought-after Vail School District.

D.R. Horton has seven different floorplans, all paired perfectly with beautiful mountain surroundings with unparalleled sunset views. Residents appreciate easy access to schools, shopping, dining and recreation.

Dan Feig with Chapman Lindsey Commercial Real Estate Service handled the transaction representing DR Horton and the seller, NT Properties c/o Steven Russo, managing member.

For more information, Feig should be reached at 520.747.4000 ext. 103.

To learn more, see RED Comp #10427

TUCSON, ARIZONA, February 14, 2023 — Saia Motor Freight purchased 19.87 acres at 7157 South Swan Road, at Swan and Los Reales Road  for construction of a truck terminal for $2.6 million ($3 PSF).

The transaction occurred on January 11, 2023.

Saia is an American less than truckload (LTL) trucking company, meaning it will transport less than a full load, that originated in Houma, Louisiana in 1924. With original operations occurring in Louisiana and Texas for the first fifty years, expansion came after 1980 when coverage began reaching into more states within the South. Further expansion happened through mergers with other companies, which allowed Saia to provide service for thirty-six states.

In 1987, the Saia family sold Saia to Preston Trucking.

The Yellow Corporation purchased Preston Trucking, along with subsidiaries Saia & Smalley, in 1993. In 1995 Saia merged with Smalley Transportation resulting in the establishment of terminals in North Carolina, South Carolina and western Texas.

In 2002 Saia and Delanco, New Jersey-based Jevic Transportation, another Yellow Corporation subsidiary, spun off to form an independent publicly traded company called SCS Transportation (SCS). Clark Brothers Transport, Inc. was acquired in 2004 incorporating its nine state, sixteen terminal operations into Saia.

In 2006, SCS sold Jevic to a Sun Capital Partners affiliate for $40 million. The sale came after years of low profitability at Jevic and allowed SCS to focus on its more successful Saia unit. Along with the sale, SCS announced plans to rebrand the parent company to Saia and move its corporate headquarters from Kansas City, Missouri to Saia’s headquarters in Duluth, Georgia. Saia president Rick O’Dell would become president, CEO, and a board member of the parent company with former chairman and CEO, Bert Trucksess, transitioning to non-executive chairman. Jevic, originally founded in 1981 by Harry Mulschlegel, would shut down in 2008 after being unable to improve its fortunes as an independent company.

Saia began trading on the NASDAQ with the symbol SAIA and ranks within the top ten of LTL carriers in the United States, with revenues of over $1.8 billion in 2020.

Saia currently has 172 terminals and serves the 48 states in the contiguous United States directly. It also serves Alaska, Hawaii, Puerto Rico, Mexico, and Canada via a network of partners.

Mike Hennessy of Burris Hennessy & Co, in Tucson represented the seller, a family trust out of Florida.

For more information, Hennessy can be reached at 520.882.4343.

To learn more, see RED Comp #10425.