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

First Tenant is Announced

PHOENIX, Arizona – Hines, the international real estate firm, recently broke ground on the Offices at Chandler Viridian and announced that Stantec, an architectural, engineering, planning and environmental services company, will locate its Southwest regional office there.

The Offices at Chandler Viridian is a six-story, Class-A office building with 250,000-square-feet of space located at the intersection of Loop 101 and Loop 202 near the Chandler Fashion Center. The building will be the tallest multi-tenant office building in Chandler at completion. Hines has a joint venture agreement with New York Life Real Estate Investors, on behalf of its institutional client, to develop the Offices at Chandler Viridian.

The office building is the capstone to the Chandler Viridian mixed-use project. In 2014, Hines razed Elevation Chandler, an unfinished structure and local eyesore, and launched the mixed-use project.

“Breaking ground on the Offices at Chandler Viridian is the culmination of years of hard work in implementing the vision of our mixed-use environment,” said Chris Anderson, managing director and Arizona leader for Hines. “Today’s groundbreaking represents tremendous investment in this high-profile location near the Chandler Fashion Center and Price Road Corridor, and an enduring collaboration among city leaders and our partners.”

The Offices at Chandler Viridian is integrated into the Chandler Viridian master plan development, a 25-acre mixed-use project which also includes a Cambria hotel & suites, Broadstone Fashion Center luxury apartments, sophisticated retail offerings at Chandler Viridian PRIMEGATE and a pedestrian promenade to the Chandler Fashion Center mall. Also featured in the master plan is a dog park, ¾-mile jogging trail connecting all of the properties, and a large public plaza with high-speed Internet and Wi-Fi – all to enhance the pedestrian experience.

Stantec has signed a 55,000-square-foot long-term lease and expects to begin operating at the Offices at Chandler Viridian in January 2019. The company will occupy approximately 22 percent of the building. The office building will have a large, open floor plan with 10-foot tall ceilings, a lounge and large courtyard.

Within the space, Stantec will be combining four regional offices to unite more than 250 specialists in mining, water, transportation, community development, environmental, buildings consulting services. The company’s collective experience reaches into more than four decades supporting communities throughout metro Phoenix and Southern Arizona.

“This location allows us to co-locate all of our talented, Phoenix-area team members in a space that not only encourages collaboration, but is easily accessible with attractive lifestyle features to enjoy,” said Curt Chapman, Stantec Southwestern regional vice president.

Alliance Bank of Arizona is providing constructing financing.

“Alliance Bank of Arizona is proud of our involvement with Hines and New York Life on this highly anticipated project in the East Valley,” said Chris Burson, senior vice president of commercial real estate lending for Alliance Bank of Arizona. “This project is attractive to us because of its prime location near the booming Price Road Corridor and is sure to be a valuable addition to Chandler’s fast-growing economy.”

The City of Chandler is looking forward to Chandler Viridian’s completion.

“Chandler Viridian is responsible for completely transforming a key area of our City starting with the demolition of Elevation Chandler,” said Chandler Councilmember Terry Roe. “The highly visible and accessible area now offers luxury residential housing, a future hotel and soon, a place for people to work with its new 250,000 square-foot, six-story office building that will be breaking ground. We couldn’t be more excited for this project.”

Jonathan Paine and John Cunningham with JLL provided advisory services for the entire financing.

Whiting Turner of Phoenix is the general contractor for the Offices at Chandler Viridian. RSP Architects of Minneapolis is designing the building.

Construction is projected to commence in the second half of 2017 and be completed in late 2018. The CBRE team of Jerry Roberts and Patrick Boyle are leading the office leasing.

Roberts and Boyle represented Hines in the lease with Stantec. Keith Lammersen and Brian Connolly with JLL represented Stantec.

SCOTTSDALE, AZ – A 4.5-acre land parcel at the SWC of Scottsdale Rd. & Chauncey Ln., Scottsdale, sold for $7,128,728 ($36.33 PSF) for a Retail, Office and Multifamily project.

Lee & Associates Principal Bob Kling negotiated the sale on behalf of the buyer, Chauncey Retail Partners, Tempe and the seller, JBL Scottsdale Market, LLC of Dallas, TX.

Plans for the property include a 300-unit, 4-story luxury apartment community, a four-building, high-end retail development with approximately 33,000-sqaure-feet facing Scottsdale Rd. One of the retail buildings will feature several floors of Class A office space above the retail component totaling approximately 20,000-square-feet.

The development will feature walkable amenities, lush landscaping, gathering spaces and an urban street environment in the spirit of other nearby developments such as Kierland Commons.

Construction is set to begin sometime in 2017.

For more information, Kling can be reached at 602.954-3751.