CBRE Research has released Q3 2017 MarketView Tucson reports on retail, industrial and office commercial real estate sectors:
Q3 2017 Retail Highlights
- Q3 2017 ended with 50,272-square-feet of negative net absorption, adding to the 112,997-square-feet of negative net absorption from the previous quarter.
- Negative net absorption in the third quarter is largely attributed to large move-outs in the Southwest and Central submarkets.
- Vacancy in the Tucson retail market ticked up 35 basis points (bps) quarter-over-quarter to 7.2% in Q3 2017. On an annual basis, this represents a 130 bps increase.
- Year-over-year, vacancy declined in only two of the six submarkets. Vacancy fell 150 bps in the Northeast submarket to 7.2%.
- In Q3 2017, the marketwide average asking lease rate increased slightly quarter-over-quarter at $15.90 triple net (NNN) per sq. ft.
- There were two new deliveries to the retail market in Q3 2017 totaling 34,500 sq. ft.
- Two projects totaling 76,500-square-feet are currently underway. One of the new developments is Houghton Town Center in the Southeast submarket, which totals 21,500-square-feet. In the Southwest submarket, developers continue construction on Phase I of Fashion Park, located on Irvington Road west of I-19 which consists of 55,000-square-feet of retail.
- To see full report click here: Q3 2017 Tucson Marketview Retail_SECURE
Q3 2017 Industrial Highlights
- In Q3 2017, Tucson’s marketwide vacancy rate decreased quarter-over-quarter to 8.2%. On a year-over-year basis, vacancy increased by 40 bps.
- The average asking lease increased slightly from the previous quarter at $0.50 NNN per sq. ft. Year-over-year, average rent increased by 6.0%.
- No new industrial developments came online in the third quarter of 2017. However, 749,928-square-feet is currently under construction. The Port of Tucson, a 238,734-square-foot rail-served warehouse, in the Southeast submarket is anticipated to deliver in Q4 2017. Additionally, Chamberlain broke ground on the 300,181-square-foot build-to-suit distribution facility in the Airport submarket.
- To see full report click here: Q32017 Tucson Marketview Industrial_SECURE
Q3 2017 Office Highlights
- In the third quarter of 2017, net absorption reached 184,040-square-feet. This was a notable improvement from the same time last year when net absorption totaled 175,284-square-feet.
- Net absorption in Q3 2017 was bolstered by the East Central and Downtown submarkets, which accounted for 85,227-square-feet and 37,267-square-feet, respectively.
- Strong demand in Q3 2017 pushed the marketwide vacancy rate down 190 bps quarter-over-quarter to 14.3%. On a year-over-year basis, vacancy decreased by 180 bps.
- No new office product was delivered during the third quarter of 2017.
- Several projects that include repositioning functionally obsolete office space to residential decreased the office base and should support fundamentals. For example, the 200,000-square-foot La Placita Village in downtown Tucson will be converted to mixed-use residential in the first half of 2018.
- To see full report click here: Q3 2017 Tucson Marketview Office_SECURE