Tucson Realty


Tucson Office Market Trending Up

Tari Auletta, CCIM, of Tucson Realty & Trust Co.,  quoted in Inside Tucson Business article Soft Office Market Shows Signs of Improving by Hillary Davis


Tucson has a soft office market. That’s not news. But brokers are encouraged that this will be a better year, with these first few months giving them hope.

Tucson’s office market is basically “marking time,” said Tom Knox, a principal and office specialist at Cushman & Wakefield | Picor. The office vacancy rate has been hovering around 12 percent for some time, he said.

But he said he’s been busier this year, largely with health care projects. That makes him optimistic that 2014 will be an improvement, if not necessarily a dramatic one.

Tari Auletta, an office specialist at Tucson Realty & Trust, agreed that 2014 has been trending up.

“Just from the activity from the first quarter, I definitely believe that we’re going to see a lower vacancy rate,” she said.

Office specialists know that recession-driven efficiencies along with changes in corporate culture have led to downsizing. Today’s office has an open floor plan, and needs less space because of the shift to digital file storage. Locally, tepid job growth has also kept the market soft.

Knox said there are currently no big growth drivers, such as commitments from major new employers.

In a tenant’s market like Tucson’s, some companies are taking advantage of depressed values to upgrade their space — today’s Class B building costs about as much as yesterday’s Class C space, so Class C tenants can move up without spending much more, Knox said.

In patterns that are more reassuring all the way around, the medical subspecialty is showing itself to be a solid performer.

Knox, who is involved with four deals for CODAC, said behavioral health has been especially active. Most recently, the comprehensive treatment services provider finished a lease of a 17,000 square-foot building at Country Club Road and Broadway Boulevard, and last year, it opened a similarly sized facility at Alvernon Way and Fifth Street.

Auletta, who also brokers medical properties, said the aging population is behind the need for specialty practices, such as pain management. She said she’s also seeing more surgery centers and urgent cares.



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