Long-Term Leases Totaling Over 22,000-SF at the Iconic Downtown Office Tower

Tucson, Ariz. – CBRE recently negotiated long-term office leases with major tenants at One South Church, the landmark building in downtown Tucson, Ariz. Global engineering firm HDR has leased 9,659-square-feet of space, while Regus, the world’s largest provider of flexible work space, has inked a deal for the entire 12,659-square-foot 12^th floor.

Buzz Isaacson with CBRE’s Tucson office represented the landlord, Chicago, IL-based Equity Commonwealth. Kevin Calihan with CBRE’s Phoenix office represented Regus, and Pat Williams with JLL’s Phoenix office represented HDR.

Regus’s lease marks its entrance to the Tucson market. The company has an expansive presence in Phoenix with 21 locations Valley-wide in the best office building in almost every submarket in the metropolitan area.

“We’re very excited about the Tucson market,” said Rob Downing, Regional Director of Real Estate for Regus. “The Southwest, and Arizona, in particular, has been a focus for us over the past several quarters. Our Phoenix centers are performing exceptionally well, but our clients were regularly inquiring about locations in Tucson. With the space at One South Church we will finally be able to meet that demand.”

Regus’s new center is currently undergoing tenant improvements to ensure the company will be able to offer its full suite of flexible workspace solutions to the Tucson market. The new work center is slated to open in mid-December. Regus is also in the process of identifying a second location in north Tucson with hopes to open that work center sometime in 2015.

HDR relocates to One South Church from their previous location at Williams Centre. The global engineering firm played a major role in bringing the Sun Link Modern Streetcar project to fruition and this move brings the company right onto the streetcar’s 3.9-mile route.

“Regus and HDR are excellent examples of companies seeing the value of locating in amenity-rich downtown Tucson,” said CBRE’s Isaacson, who has held the marketing and leasing assignment for One South Church since 1986 and has brokered the sale of the building twice. “There has definitely been a demographic shift toward urban, live-work-play environments. Smart employers recognize that in order to attract and retain top talent they need to locate in areas that offer the “lifestyle” type of work environments employees want.”

Built in 1986, One South Church is Tucson’s premier high-rise office building. Located in the heart of downtown Tucson, the 23-story office tower is located in one of Tucson’s three major employment centers, along with the University of Arizona and Tucson International Airport. Located along the new Sun Link Modern Streetcar route and within minutes of Interstate-10, which boarders the west side of downtown, the property benefits from easy accessibility as well as the numerous retail amenities located in the area.

To learn more Isaacson should be reached at 520.323.5151

A recent report from Cushman & Wakefield indicates a stong correlation is found between U.S. retail sales and U.S. industrial leasing activity.

We know retail sales measure economic activity in the economy and thus serve as an important indicator of economic health.  But, only those retail categories subject to the state’s transaction privilege (general sales) tax are included in the retail sales data produced by the Arizona Department of Revenue. For example, sales of food items at grocery stores that are not taxed by the state are not included.

The state Department of Revenue reports consumer spending is up to prerecession levels based on April sale tax receipts, covering March spending in Arizona, in fact up by a large 8.2% increase from the same period a year earlier, with taxable sales of $4.78 billion in March 2013. Monthly data for Arizona becomes available approximately two months after the sales were made to allow time for adjustments, as retailers sometimes report late and multi-establishment retailers sometimes misreport sales by county.

The Cushman & Wakefield research shown in the above graph indicates that industrial leasing activity in markets where they track have followed the U.S. retail sales closely year over year since 2000.  Industrial leases exceeded retail sales from 2000 – 2007, and as retail sales dropped in 2008 – 2009 industrial leases trended in the same direction.

According to the the Tucson Cushman & Wakefield / Picor industrial report for Q1 2013, “for the first time in two full years, the Tucson market had consecutive quarters of significant positive absorption… with lease activity fairly broad based”.  To view the full Q1 2013 Tucson Industrial report click here.

Economists with the Arizona Department of Revenue have stated April collections are typically high, with spring training and winter visitors still around. But it should also be noted that this spending increase is still on top of the record set last April for March sales. It seems to all be trending in the right direction and something to keep an eye on.

For the full Cushman & Wakefield “US Retail Sales vs. Industrial Industrial Leasing Activity” report  click here.