The following commercial leases were reported to the Real Estate Daily News for the Tucson Lease Report from Oct. 2 thru 6, 2017.

INDUSTRIAL – 2350 W. RIVER PARK DR., TUCSON
Convergys Customer Management Group Inc. renewed their lease with North Tucson, LLC for 91,200-square-feet at 2350 W. River Park Dr. in Tucson. Convergys partners with clients to improve customer loyalty, reduce costs, and generate revenue through an extensive portfolio of capabilities, including customer care, analytics, tech support, collections, home agent, and end-to-end selling.  Stephen D. Cohen and Russell W. Hall, SIOR, GSCS, Industrial Specialists with Cushman & Wakefield | PICOR, represented the landlord in this transaction.

OFFICE – 1455 W. RIVER RD., TUCSON
Mural Consulting Corporation leased 20,000-square-feet at 1455 W. River Rd. in Tucson from 1455 W. River Road, LLC.  Rick Kleiner, MBA, and Greg Furrier, Principals with Cushman & Wakefield | PICOR, represented the landlord.  Buzz Isaacson with CBRE, represented the tenant in this transaction. [mepr-show rules=”58038″]Asking lease rate: $14.00 SF/YR NNN[/mepr-show]

INDUSTRIAL – 3440 E. BRITANNIA DRIVE, TUCSON
Machine Solutions, Inc. leased 18,779-square-feet of industrial space at 3440 Britannia Drive in the Britannia Business Center. Ryan Timpani of Colliers International represented the tenant. Bill DiVito and Jesse Blum of CBRE represented the landlord, Britannia Tucson, LLC, in the transaction.

INDUSTRIAL – 4175 S. FREMONT AVE., TUCSON
Wist Supply & Equipment Co. leased 6,230-square-feet at 4175 S. Fremont Avenue, Suite 107 in Tucson, from Doubletree Investments, Inc. Stephen D. Cohen and Russell W. Hall, SIOR, GSCS, Industrial Specialists with Cushman & Wakefield | PICOR, represented the landlord in this transaction.  Ken McQueen, with Lee & Associates Arizona Commercial Real Estate Services, represented the tenant. [mepr-show rules=”58038″]Asking lease rate: $6.60 – $7.20 SF/YR Modified Gross[/mepr-show]

INDUSTRIAL – 3251 S. DODGE BLVD., TUCSON
Titan Solar Power leased 5,000-square-feet at 3251 S. Dodge Blvd. in Tucson, from El Gato Investment Two, LLC.  The team of Russell W. Hall, SIOR, GSCS, Stephen D. Cohen, and Kelly Fickle, Industrial Specialists with Cushman & Wakefield | PICOR, represented the landlord in this transaction.  Larry Beddome, CCIM with Keller Williams Success Realty, represented the tenant. [mepr-show rules=”58038″]Tenant Phone: 520.659.3737[/mepr-show]

INDUSTRIAL – 3757 E. 43^rd PL., TUCSON
Cognition Engineering, LLC subleased 4,952-square-feet at 3757 E. 43^rd Pl. in Tucson from Feller’s, Inc.   Russell W. Hall, SIOR, GSCS and Stephen D. Cohen, Industrial Specialists with Cushman & Wakefield | PICOR, represented the landlord in this transaction.   Tim Healy with CBRE, Inc. represented the tenant.

OFFICE – 1640 E. RIVER RD., TUCSON
American Financial Network, Inc. leased 3,926-square-feet of office space in Mesquite Corporate Center, 1640 E. River Rd., Suite 208 in Tucson, from George Caughman.  Tom Nieman, Office Specialist with Cushman & Wakefield | PICOR, represented the landlord in this transaction.  David Montijo with CBRE, Inc., represented the tenant.

RETAIL – NW CORNER of CAMPBELL AVE. & GLENN ST., TUCSON
Starbucks Corporation leased 2,800-square-feet of retail space at the northwest corner of Campbell Ave. and Glenn St. in Tucson, from North Campbell, LLC.  Greg Furrier, Retail Specialist with Cushman & Wakefield | PICOR, represented the tenant in this transaction.

OFFICE – 3131 N. COUNTRY CLUB RD., TUCSON
Casa de los Niños leased 2,730-square-feet of office space at 3131 N. Country Club Rd., Suites 101 & 102 in Tucson, from Spirits, LP.  Isaac Figueroa, Office and Investment Specialist with Cushman & Wakefield | PICOR, represented the landlord in this transaction. [mepr-show rules=”58038″]Asking lease rate: $13.00 SF/YR Modified Gross; Tenant Phone: 520.624.5600[/mepr-show]

RETAIL – PLACITA DEL NORTE SHOPPING CENTER, TUCSON
Rigo’s Mexican Restaurant leased 2,600-square-feet of retail space in Placita del Norte Shopping Center in Tucson, from CAS Real Property, LP.  Greg Furrier and Diane Carlson, Retail Specialists with Cushman & Wakefield | PICOR, handled this transaction. [mepr-show rules=”58038″]Tenant Phone: 520.882.9323[/mepr-show]

RETAIL 6501 E. GRANT RD., TUCSON
Hoki Poki Bowl leased 1,800-square-feet at 6501 E. Grant Road, Suite 121 in Tucson, from CH Retail Fund I / Tucson Grant Road, LLC.  Greg Furrier, Retail Specialist with Cushman & Wakefield | PICOR represented the landlord in this transaction.  Kevin Kramber, with Town West Realty, Inc., represented the tenant.

RETAIL – NE CORNER of BROADWAY BLVD and HARRISON RD, TUCSON
Girlfriend’s Closet, LLC leased 1,625-square-feet from Grabbert Ranch, Inc. The new location is in the Broadway Albertson’s Center located at the northeast corner of Broadway Blvd. and Harrison Rd. in Tucson.  Girlfriend’s Closet is a high-end consignment store offering clothing, accessories, and furnishings. Rob Tomlinson and Greg Furrier, Retail Specialists with Cushman & Wakefield | PICOR, handled this transaction.

INDUSTRIAL – 3538 N. ROMERO RD., TUCSON
The Tucson Team, LLC leased 1,500-square-feet at 3538 N. Romero Rd., Suite 154 in Tucson, from Costa Verde Investments, LLC.  Ron Zimmerman, Commercial Specialist with Cushman & Wakefield | PICOR, represented the landlord in this transaction. [mepr-show rules=”58038″]Asking lease rate: $7.80 SF/YR Modified Gross; Tenant Phone: 520.419.6517[/mepr-show]

INDUSTRIAL – 850 E. OHIO ST., TUCSON
Custom Cabinetry by Anthony Vega leased 1,390-square-feet at 850 E. Ohio St., Suite 2 in Tucson, from RRL, Inc.  Max Fisher, Industrial Specialist with Cushman & Wakefield | PICOR, handled this transaction.

OFFICE – 3131 N. COUNTRY CLUB RD., TUCSON
Emma K. Hestand, CPA, PLLC leased 1,250-square-feet of office space at 3131 N. Country Club Rd., Suite 109 in Tucson, from Spirits, LP.  Isaac Figueroa, Office and Investment Specialist with Cushman & Wakefield | PICOR, represented the landlord in this transaction.[mepr-show rules=”58038″] Asking lease rate: $13.00 SF/YR Modified Gross; Tenant Phone: 520.326.8483[/mepr-show]

RETAIL – 3829 E. BROADWAY BLVD., TUCSON 
Red Wing Shoes, Inc. leased 1,200-square-feet of retail space feet at 3829 E. Broadway Blvd. in Tucson from San Clemente, LLC.  Greg Furrier, Retail Specialist with Cushman & Wakefield | PICOR, represented the tenant in this transaction.  John Galen, with Shenkarow Realty Advisors, represented the landlord.

OFFICE – 5055 E. BROADWAY BLVD., TUCSON
HM Management LLC, leased 1,116-square-feet of office space at 5055 E. Broadway Boulevard in the New World Plaza. David Volk of CBRE represented the tenant. David Montijo and Damian Wilkinson of CBRE represented the landlord, Pacific Income Properties, LLC, in the transaction. [mepr-show rules=”58038″]Tenant Phone: 520.338.2600[/mepr-show]

RETAIL – 4608 E. GRANT RD., TUCSON
Angela Brenay Woods, dba Unique Shears Hair Studio, leased 1,000-square-feet of retail space at 4608 E. Grant Road in Tucson, from H.L.F. Properties, Inc.  Isaac Figueroa and Rob Tomlinson, with Cushman & Wakefield | PICOR, represented the landlord in this transaction.  Chris Tsighis, with Coldwell Banker Residential Brokerage, represented the tenant. [mepr-show rules=”58038″]Tenant Phone: 520.468.8797[/mepr-show]

INDUSTRIAL – 2112 N. DRAGOON ST., TUCSON
Jeff Schaufel leased 1,000-square-feet at 2112 N. Dragoon St., Suite 11 in Tucson, from Rich Rodgers South, Inc.  Max Fisher, Industrial Specialist with Cushman & Wakefield | PICOR, represented the landlord and the tenant in this transaction.

INDUSTRIAL – 2112 N. DRAGOON ST., TUCSON
Blades Enterprise leased 1,000-square-feet at 2112 N. Dragoon St., Suite 16 in Tucson, from Rich Rodgers South, Inc.  Max Fisher, Industrial Specialist with Cushman & Wakefield | PICOR, represented the landlord and the tenant in this transaction.

RETAIL – PLACITA DEL NORTE SHOPPING CENTER, TUCSON
Arizona Auto Savings leased 990-square-feet of retail space from CAS Real Property, LP, in Placita del Norte Shopping Center in Tucson.  Greg Furrier and Diane Carlson, Retail Specialists with Cushman & Wakefield | PICOR, handled this transaction. [mepr-show rules=”58038″]Tenant Phone: 520.888.8877[/mepr-show]

RETAIL – 3912 E. GRANT RD., TUCSON
Gheorghe and Aimee Vasile, dba Cigarettes Cheaper, leased 900-square-feet of retail space at 3912 E. Grant Rd. in Tucson from Grant and Alvernon Realty Trust.  Greg Furrier, Retail Specialist with Cushman & Wakefield | PICOR, handled this transaction.

RETAIL – 13 N. STONE AVE., TUCSON
Three Wells Distilling Company leased 844-square-feet of retail space 13 N Stone Avenue in Downtown Tucson. Michael Laatsch of CBRE represented the tenant and the landlord, BC Limited, LLC, in the transaction.[mepr-show rules=”58038″] Tenant Phone: 520.205.1363[/mepr-show]

INDUSTRIAL – 3830 E. 44^th ST., TUCSON
Habitat Studios leased 750-square-feet at 3830 E. 44^th St., Suite 256 in Tucson, from RR44, Inc.  Max Fisher, Industrial Specialist with Cushman & Wakefield | PICOR, represented the landlord and the tenant in this transaction.

Georgetown and Park Village Communities Sold for $6.1+ Million

Phoenix, Arizona – Colliers International in Greater Phoenix has sold two different apartment communities in Tucson for a total sales price of $6,149,000 ($39,417 per unit) .  The developments contain a combined 156 apartment units and were sold to separate California-based investors.

“These two properties offered outstanding opportunity for long-term investment benefits,” says Jesse Hudson, associate with Colliers International in Greater Phoenix.  “Both Georgetown and Park Village provide immediate, attractive cash flow with capital improvement options that could bring stronger revenue in the future.”

Hudson, Trevor Koskovich and Bill Hahn of Colliers International in Greater Phoenix marketed the properties and negotiated the sales.

Georgetown Apartments were built in 1972 and are located at 2510 N. Winstel Blvd.  The community contains 96 apartment units totaling 71,659-square-feet on 3.52 acres of land.

Transpacific Asset Management of California purchased the community from Georgetown Apartments Tucson, LLC for a price of $4,224,000 ($44,000 per unit).  Transpacific Asset Management owns several assets in Greater Phoenix and Tucson.

Located just three miles from University of Arizona, Georgetown Apartments features primarily two and three-bedroom townhome units with private patios.  Its outstanding central Tucson location and wide array of amenities has made Georgetown Apartments a popular leasing destination.  Units include oversized closets, large fenced patios, great mountain views, gas stoves and wood style flooring within a community that offers 24-hour maintenance service, beautiful pool and barbecue areas, as well as on-site professional management.

Park Village is located at 5290 S. Park Ave. and was constructed in 1985.  Alpha Wave Investors, LLC, a private equity investment company from California, purchased the community from California-based Jesus Alfredo Estupinian for a price of $1,925,000 ($32,083 per unit).  The community contains 60-units situated in two-story buildings on 1.84 acres of land.  The buyer owns several assets in Tucson and Las Vegas and this represents an expansion of their portfolio.

The community features 60 percent one-bedrooms and the remainder are two-bedroom units.  Apartments feature private balcony/patio, semi-private entry and outside storage.

Market Expected to Remain Strong As Demand Continues and Rates Increase

Phoenix, Arizona –  The Greater Phoenix office market remained strong in the first quarter of 2017 with positive net absorption and rising rental rates, according to a report released today by Colliers International in Greater Phoenix.  Vacancy rose slightly during the first three months of this year, responding to heightened development activity. You can access the full report by clicking Here.

Vacancy ended the first quarter at 16.5 percent, 30 basis points higher than year-end 2016.  Despite the uptick, vacancy in the city remains 70 basis points below the same time last year.  This is likely a short-term disruption in the market’s improvement cycle as the delivery of new supply accelerated during the first three months of this year.

The market increased by 1.2 million square feet during the first quarter, including the delivery of the final building of State Farm’s facilities at Marina Heights in Tempe. The Tempe submarket has posted one of the lowest vacancy rates in the metro area for the past several years and is leading the city in new development.  More than 300,000 square feet of new spec office was delivered in Tempe during the first quarter and additional projects are likely to break ground before year-end.

Net absorption in the Phoenix office market totaled approximately 830,000 square feet during the first quarter of 2017.  This extends the market’s trend of averaging 800,000 square feet of absorption per quarter during 2016.  This is the market’s eighth consecutive quarter of positive net absorption.  The Airport Area posted net absorption of 198,000 square feet during the first three months with nearly 70 percent of that taking place in two large spec building leases.

Rental rates in Greater Phoenix are rising at a consistent pace, reaching $23.76 per square foot in the first quarter 2017.  Rates have increased each of the last four years and the most recent rates mark a 4.5 percent increase from a year earlier. Rents are expected to trend even higher as vacancy tightens.  Asking rents are expected to gain approximately five percent during 2017, building on the six-percent increase experienced in 2016.

The Greater Phoenix investment sales market for office buildings slowed a bit in the first quarter of 2017.  The median price per square foot dropped, but cap rates remained relatively unchanged.  The decrease in price reflects the assets that changed hands in this timeframe, rather than a movement in market sentiment. The investment market has remained consistent and the forecast for continued demand and rising rates indicates we will post price increases for the fifth consecutive year.

The improvement cycle of Phoenix is expected to post further gains for the remainder of 2017.  The market is in the later stages of recovery, however, meaning that there could be a few quarters of softer conditions over the next 18-24 months.  Population-serving sectors will likely drive growth in the coming quarters.  The population in Greater Phoenix is forecast to grow by more than 100,000 residents annually for the next few years. Housing, education, healthcare, financial and other professional services industries are expected to drive this population and job growth.  Investment sales should remain healthy, despite the anticipation of more interest rate hikes.  While borrowing costs will rise, the main driver of investment performance is the operating fundamentals of the properties.  Continued absorption and rental rate increases will strengthen those fundamentals.