Winning the race for space: Tucson’s commercial real estate market is heating up
GUEST BLOG
Michael Coretz
Real Estate Advisor,
Commercial Real Estate Group of Tucson
A slow recovery in Tucson commercial real estate means now is the time to take advantage of low rents and increased landlord incentives before the market heats up later this year. That’s my take here at COMMERCIAL REAL ESTATE GROUP OF TUCSON, where I see indicators that national and local markets will slowly but steadily improve as businesses work out what they will look like after emerging from the COVID-19 disruption.
This may seem to go against recent news that the TUCSON AND ARIZONA RECOVERIES from the COVID-19 disaster will likely be faster than in other parts of the country. That will likely hold true, but it doesn’t mean increased activity will move quickly. That’s partly because tenants will stay where they are while deciding whether to RECONFIGURE THEIR BUSINESS OPERATIONS and, if so, how.
“… (C)orporate occupiers are beginning to consider when, how and where to bring workers back to the office and how much space might be needed to accommodate them,” according to WealthManagement.com. Decisions ought to be made in late spring to implement changes in the summer and have workers return by September, it said.
That’s real soon. I believe that starting this work right now will give early birds a jump on finding the Tucson commercial real estate space they want without major competition from other tenants.
STATE OF TUCSON COMMERCIAL REAL ESTATE
Demand for TUCSON OFFICE SPACE already is heating up, a reversal of what the U.S. picture looks like. While Kiplinger predicts raising vacancy rates and falling rents nationally, Tucson is seeing an increase in office occupancy, and the vacancy rate is lower than the national average. However, office rents in Tucson are still weak. Landlords are making other concessions to keep their buildings occupied. That will work in your favor if you can find what you want.
TUCSON INDUSTRIAL SPACE is even hotter as manufacturers find ways to reshore operations, generating rising demand in logistics and distribution. There’s a local increase in industrial space occupancy. Nationally, occupancy rates also are expected rise this year. But opportunities to save on new lease or investment still exist. The Tucson vacancy rate is higher than the national average and rents are not rising as fast as nationally. Retail spaces nationwide will be plentiful if they are not shut down from bankruptcies. It’ll be a tough year overall.
But consumer spending is stronger in Tucson than the national average. Retail trade jobs are growing faster, too. That shows that TUCSON RETAIL SPACE will continue to be sought after, although some of those locations may be used as fulfillment facilities as businesses adjust to more online shopping. An enlightened landlord may provide tenant improvement incentives to reconfigure space to meet the new retail models.
WINNING THE RACE FOR TUCSON COMMERCIAL REAL ESTATE
Savings and incentives for new Tucson commercial real estate space are available for businesses that can demonstrate they are bouncing back from the disruption. Business owners will find opportunities for right-size and -function locations as relocation activity churns with moves to accommodate new operations models. I can offer my best analyses on how you can save in the current Tucson market. CONTACT ME for an immediate, complimentary consultation, 520-299-3400. The time to strike is now.
Read all of CREG Tucson’s articles on COVID-19.
In his 25-plus years as a commercial real estate tenant representative, Michael Coretz has picked up a wealth of information and expertise. He’s passionate about making sure that corporate users, tenants and buyers like you get a fair deal and the best solution for your business’s bottom line. Commercial Real Estate Group of Tucson specializes in representing tenants and corporate users across the United States, Latin America, Europe and Asia. For more information, call 520-299-3400 or visit www.commercial-real-estate-tucson.com.