The Real Estate Daily News posted an article focused on Pat Darcy’s look at the 2014 Retail Market.
Pat Darcy, Retail Division Head of Tucson Realty & Trust Company is looking forward to 2014 claiming the Tucson Retail Market is steadily improving, similar to its performance last year…with two steps forward and one step back!
There was only one speculative retail center built last year. Steven Mar built a 10,000 square-foot retail building west of the intersection of Ina and Thornydale in Marana, located just in front of Harbor Freight on Ina. People in the Retail business thought Mar was a brave man as he started construction last spring without any tenants, but the space was 100% leased before completed by tenants such as R&S Mattress that will take occupancy soon.
“New retail developments near major intersections are very attractive to tenants,” Darcy says.
“The current retail vacancy in Tucson metro area is approximately 8% and there was 800,000-square –feet of net absorption in 2013. Quoted retail lease asking rates are averaging $15.70 per square foot NNN,” Darcy reported.
“In my opinion, there were three reasons for the Tucson market increased retail absorption: first, the small amount of new retail construction in the past two years; second, the redevelopment of central area properties by retails such as Walmart Neighborhood Markets, Walgreens, CVS, Quick Trip and Circle K; and third, the leasing of most of our vacant big boxes to tenants such as Stein Mart, Hobby Lobby, Chuze Fitness, Floor & Décor and Conn’s Home Entertainment,” Darcy explained.
Redevelopment of properties in central Tucson has been a good thing. There was too much outdated retail space in Tucson’s central core and assemblages have taken these older, smaller retail spaces off the market and replaced them with new spaces and stronger retail tenants. A good example is the redevelopment of the old El Mercado Shopping Center at the southwest corner of Broadway and Wilmot. Approximately 40,000-square-feet of obsolete shop space was taken down for a new drug store and pads for new retail development.
Darcy isn’t expecting a lot of new retail development to occur in 2014. Two major centers scheduled to open this year are at Houghton Town Center, anchored by a Super Walmart, and Conn’s Home Entertainment’s 40,000 –square-feet and Guitar Center’s 11,500 –square-feet currently under construction at Marana Marketplace, a Larsen Baker project.
Read the complete Real Estate Daily News article.