More Related Content More from Barbi Reuter (6) Tucson Market Review 2011/2012 Forecast3. Market Review
■The great (expectation) reset
■Shift from uncertainty to stability
–Housing
–Consumer spending
–Rates/occupancy
■Corporate consolidations
■Broad dynamics with local impact
–Jobs
–Deficits at all levels
–Infrastructure needs
■Community assets
■Tourism as driver
4. Tucson Construction Completions
1,871
1864
1,443
Thousand SF
820
650
518
485
445
479
467
424
423
411
358
245
143
129
51
2006 2007 2008 2009 2010 2011
Office Retail Industrial
Source: CoStar
7. Office
$22.00 14.0%
$21.00
$20.00 12.0%
$19.00
psf/yr
$18.00 10.0%
$17.00
$16.00 8.0%
$15.00
$14.00 6.0%
$13.00
$12.00 4.0%
2007 2008 2009 2010 2011
OVERALL GROSS RENT OVERALL VACANCY RATE
Source: CoStar
8. Office
■2011
–Improving fundamentals
–Increased lease activity year end
–Limping sale market
–Stable medical office market
■2012
–Bright future downtown
–Office demise? Footprint change = opp
–Pent up demand remodel/cap upgrades
–Grant Rd relocations/redevelopment
9. Retail
$25.00 10.0%
$20.00 8.0%
$15.00 6.0%
psf/yr
$10.00 4.0%
$5.00 2.0%
$0.00 0.0%
2007 2008 2009 2010 2011
OVERALL RENT VACANCY RATE
Source: CoStar
11. Retail
■2011
–Strong finish (spending, improvements, auto)
–Positive absorption (376K)
–Development/redevelopment traction
–Active competition for location/corners
■2012
–Bricks/mortar demise? (change/opp)
–Benefit from improving housing market
–Stabilized rates
–Continued flight to quality
–Increased investor activity
12. Industrial
$1.00 12.0%
$0.80 10.0%
psf/mo
$0.60 8.0%
$0.40 6.0%
$0.20 4.0%
$0.00 2.0%
2007 2008 2009 2010 2011
OVERALL NET RENTAL RATE OVERALL VACANCY RATE
Source: CoStar
13. Industrial
■2011
–Corporate consolidations
–Increased economic development activity
–Tale of 3 lease markets
–Sales dominated by distress
■2012
–Large Vacancies = opportunity
–Logistics & “Reshoring”
–Mining support
–Construction supply survivors
14. Summary
■Where are the opportunities?
■How will proximity to Mexico support growth &
opportunity?
■When will the windows close/pendulum shift?
15. Resources
■Resources
– www.picor.com
@PICORcres
– PICOR
– PICOR
– PICOR Connect: Trends in Commercial Real
Estate (blog.picor.com)