A 25,000 sq. ft. luxury estate on 20 acres with 4 ready-to-build lots was listed in 2007 for $22 million. “The price was lowered to $15.9 million in 2011 and reduced to $12.95 million in 2012,” the Wall Street Journal quoted the current listing agent, Martha Briggs of Long Realty in Tucson. It is now scheduled to be auctioned with a minimum bid of $8.4 million.

The estate at 7474 N. Catalina Ridge Drive, Tucson, Arizona 85718 is on 6 acres with four ready to build 3.3 acres homesites The offering can be purchased in its entirety or as individual parcels.

The owner, Carey Marmis, is a real estate developer who assembled the land in multiple transactions during the 1980s and spent almost a decade designing and building the house complete with views of the Tucson valley, has seven bedrooms, 11 bathrooms, a library and home theater, two elevators, a 2,200-bottle wine cellar, a 45-foot wall of Coconino sandstone, and a stainless steel roof. There is also an Olympic-size shooting and archery range, a pool and tennis court according to the auction company.

The auction, with bids due May 14th by 5:00 p.m., is being handled by Sheldon Good & Company of New York. To participate, a bidder must view the property by appointment during the open house dates from 4:00 to 7:00 p.m. on the following dates: April 20, 21, 26 and 27; May 3, 4, 10, 11 and 12.

A bidder information packet is available for $50 and can be obtained online at https://www.sheldongood.com/Real-Estate-Auction, at on-site inspections, at all open houses, or by calling the auction center at 800-315-2199.

There is a 2.5% co-broke fee offered.

Briggs can be reached at (520) 240-8806. Buyers should call (800) 480-0061 or email auctionrequest@sheldongood.com

A recent version of this article appeared March 27, 2013 on page C6 in The Wall Street Journal, with the headline: Mall Landlords Get a Penney for Thoughts. Penney leases three spaces in Tucson, the El Con Mall (115,900 SF), Tucson Mall (136,864 SF) and Tucson Spectrum (99,956 SF). We encourage readers to comment on this article and make any suggestions for options they would like to see at these sites.

U.S. shopping-mall owners, already hit with store closures by longtime laggard Sears Holding Corp., are now pondering what steps to take if struggling chain J.C. Penney Co. closes some of its 1,104 stores.

The 111-year-old retailer is struggling after it failed to spur sales and attract new clientele with such striking programs as eliminating sale promotions in favor of making low prices the chain’s standard. Penney is pushing ahead, though, with a plan to re-create hundreds of its properties as collections of boutique stores for brands such as Joe Fresh and Jonathan Adler. The changes, however, are expensive. Penney finished its prior fiscal year with $930 million of cash, down significantly from prior years.

Penney hasn’t announced any plans to sell or close stores in the wake of posting a $985 million net loss and a 25% decline in sales for its fiscal year ended Feb. 2. Yet investors and analysts are querying mall owners about their contingency plans in case Penney vacates certain stores – at least 675 of which are in malls.

The retailer’s struggles have some observers thinking it soon will turn to its real estate as a savior by selling some of the 429 stores it owns or the long term contracts on those it leases. “The challenge is that they may need more cash to complete their transformation,” said Cedrik Lachance, an analyst with Green Street Advisors Inc., which tracks real estate investment trusts, including most big mall owners. “To that end, I think that J.C. Penney may look to its real estate as a source of cash.”

Mall owners predict that it wouldn’t be difficult to replace Penney stores in the best U.S. malls, where other large tenants might want to take over space. In other cases, mall owners could restructure the space to house several smaller stores.

Macerich has 36 Penney stores in its U.S. portfolio of 62 malls. Art Coppola, Macerich’s chairman and CEO, said he anticipates that Penney will remain a viable tenant for mall owners. But, “we have a plan for each and every (Penney) location,” Mr. Coppola told investors at a conference in Hollywood, FL, hosted by Citigroup, Inc. on March 5. “Some of them would be terrific. Some of them would be OK. And some of them would be more challenging.”

Possibilities include Penney selling some of its stores and leasing them back, or Penney selling some to mall owners who intend to raze them and rebuild them for other tenants. The latter is most likely to occur in malls with high sales volumes, where demand from other retailers for space is strong.

The trouble for Penney is that its stores are skewed toward average malls. Since the recession, retailers and shoppers have favored strong malls over their average and struggling peers. And the few expanding department stores that might replace Penney tend to choose the best malls in each market.

Mall owners, in turn, are spending most of their time and capital redeveloping proven malls to generate more sales rather than pouring money into struggling properties unlikely to produce a similar return.

According to Green Street, 157 Penney stores are located in so called A-grade malls, which typically generate sales per square foot of $350 or more. Far more of Penney stores (351) are in B-grade malls, which generate annual sales of $325 to $450 per sq. ft. Another 146 of Penney stores are in C-grade malls, which generate annual sales of $200 to $325 per sq. ft., and many of those are struggling to remain malls. The U.S. average for malls is $391 per sq. ft.

What would you suggest for the JC Penney stores in Tucson?

INDUSTRIAL SPACE – 3850 E. 44th Street, Tucson
Aguirre Enterprises of Nogales, AZ leased 20,364 sq. ft. at 3850 E. 44th Street in Tucson from CJ Southwest Property Partners, LLC for a wheel and tire warehouse dba California Tire Store. Stephen Cohen and Russ Hall, Principals and Industrial Specialists with Cushman & Wakefield | PICOR Commercial Real Estate Services, handled this transaction.

INDUSTRIAL SPACE – 2155 N. Forbes Boulevard, Suite 104, Tucson
Trane U.S. renewed their 16,795 sq. ft. lease at 2155 N. Forbes Boulevard, Suite 104 in Tucson from Forbes Tucson, LLC. Rob Glaser, Industrial Specialist with Cushman & Wakefield | PICOR Commercial Real Estate Services, represented the Landlord in this transaction.

INDUSTRIAL SPACE – 845 E. Ohio, Suite 109, Tucson
AAA Old Pueblo Moving and Storage leased 10,000 sq. ft. at 845 E. Ohio, Suite 109 in Tucson from 845 Ohio, LLC. Brandon Rodgers, CCIM, Industrial Specialist, Russ Hall, Industrial Specialist and Stephen Cohen, Industrial Specialist with Cushman & Wakefield | PICOR Commercial Real Estate Services, represented the landlord and Rob Fischrup with Vast Commercial represented the tenant.

INDUSTRIAL SPACE – 3837 E. 37th Street, Tucson
Record Energy Concepts, Inc., a heating and cooling service company, leased 3,750 sq. ft. of warehouse space at 3837 E. 37th Street in Tucson from Bob’s Thirty-Seventh Street Property, LLC. Jeff Zellet, Retail Specialist with Cushman & Wakefield | PICOR Commercial Real Estate Services, represented the landlord in this transaction

INDUSTRIAL SPACE – 3819 S. Evans Boulevard, Suite 303, Tucson
Earth Song Botanicals / New Star Nootropics of Tucson leased 930 sq. ft. at Ajo/Evans Business Park – 3819 S. Evans Boulevard, Suite 303, in Tucson from Ajo/Evans Business Park, LLC. Pat Welchert, SIOR, Industrial Specialist and Jeff Zellet, Retail Specialist with Cushman & Wakefield | PICOR Commercial Real Estate Services represented the landlord in this transaction.

RETAIL SPACE – 1870 W. Prince Road, Suite 3, TUCSON
Darin & Diana Weathersby, DBA Affordable Windows of Tucson, leased 1,440 sq. ft. at 1870 W. Prince Road, Suite 3 in Tucson from Presson Corporation. Rob Glaser, Principal, and Paul Hooker, Industrial Specialists with Cushman & Wakefield | PICOR Commercial Real Estate Services, represented the landlord and Jeff Zellet, Retail Specialist with Cushman & Wakefield | PICOR Commercial Real Estate Services represented the tenant.

FLEX SPACE – 4500 E. Speedway, Tucson, AZ
The following businesses leased and renewed space at 4500 E. Speedway from Presson Midway, LLC: CQR Holdings, LLC leased 1,067 sq. ft. in suite6. Visual Images Production, Inc leased 1,600 sq. ft. in suite 8. Sushi Ten leased 3,100 sq. ft. in suites 1& 2. Universal Protection Service leased 958 sq. ft. in suite 2A and 1,620 sq. ft. to Nails to Go Go in suite 87. Rob Glaser, Principal and Paul Hooker, Industrial Specialists with Cushman & Wakefield | PICOR Commercial Real Estate Services, handled these transactions.

TENTATIVE OFFICE LEASE – 100 N STONE AVE, TUCSON
Gangplank of Tucson, an Arizona nonprofit that fosters creative, collaborative and entrepreneurial working environments reports it is about to finalize negotiations with an affiliate of Holualoa Companies for an 8,000 sq. ft. in the Pioneer Building at 100 N Stone Ave. with free rent for the first six months from the landlord and help from supporters. The nonprofit has also applied for financial assistance from the City of Tucson for economic development program.

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