Tucson’s commercial market is “still not rocking and rolling” due to the uncertainty in the national economy and a loss of faith in home ownership, local brokers say.
“We’re a bit better, but still limping,” Hank Amos, CEO of Tucson Realty and Trust Co., said Tuesday during a midyear update on the market.
Some industry data shared by the firm’s brokers included:
- The industrial market, also known as the job creator, remains flat and existing vacant space does not meet the height requirements of logistics-related companies that are attracted to Arizona.
- The lack of jobs growth creates a hesitation to invest in a home and leads people to rent instead because of the flexibility to follow a job to another city or state. “Some first-time home buyers value their automobile, a smartphone or Netflix over a mortgage,” said Chuck Blacher, an industrial specialist with Tucson Realty and Trust.
- Office vacancy rates remain around 18 percent since the beginning of the year as employers encourage telecommuting, said Tari Auletta, an office and medical property specialist.
- Retail centers are attracting nontraditional tenants such as urgent care centers that take advantage of both foot traffic and ample parking.
- National investors have poured big bucks into the Tucson market with more than $100 million of investment purchases so far this year. Premium properties such as Spectrum Mall and El Con are examples of properties in demand by national investors, said Terry Lavery, an investment specialist.
“It is difficult to get excited to invest in office, industrial land given Tucson’s current economic conditions and lack of business vitality or velocity,” he said. continue reading the article in the Arizona Daily Star by Gabriela Rico