RSD Inc purchased 2101-2103 E 19th St in the downtown industrial sub market as a distribution hub for air conditioners and air conditioning supplies.
As the demand for residential and industrial real estate increases, the demand for HVAC products, electrical products, and plumbing products has been increasing quickly. This will be RSD's second distribution building in Tucson.
The downtown industrial market hit a small bump when COVID hit due to businesses that serve the downtown retail market closing or downsizing. Since then, the downtown industrial market has bounced back. Vacancy is around 2% now and rates are steadily increasing. We can expect the downtown industrial market to continue to improve from the demand for last mile distribution and the demand from construction contractors.
Max Fisher and Rob Glaser of PICOR Commercial Real Estate represented the seller and Cushman & Wakefield of Los Angeles represented the buyer.
RBEX Inc purchased 5951 S Wilmot for $1,750,000.
The industrial market continues to grow in a strong and steady direction as distribution and residential housing continues to grow quickly.
Arizona as a whole outpaces the rest of the country by far when it comes to unemployment rates, economic growth and real estate activity. Migration patterns continue to favor Arizona as residents migrate to Arizona from densely populated cities and states. Reasons for migration include COVID, real estate prices, taxes, regulations and climate. As this mass migration continues, the demand for the residential market continues to stay very strong. This demand is fueling the industrial market as residential developers spur more demand for industrial supply houses and trade related businesses.
Migration and the upcoming wave of demand from marijuana cultivators are going to slim the industrial inventory even more over the next year. We can expect lease rates and sale rates to increase.
Max Fisher of Cushman & Wakefield | PICOR handled this transaction
3224 N Freeway Industrial Loop
-8,400 SF available
-20+ parking spots
-14' roll up doors
-I-10 visibility and signage
-Frontage road access
-Custom build out per tenant's needs
Contact Max Fisher email@example.com or 520-465-9989
Listed by BRD Realty
Tucson Demand Predictions:
Tucson Supply Predictions:
Office: No change
Migration is the largest economic spur right now for Tucson. Migration from densely populated cities will continue to increase. Why? 3 reasons.
1) Employees paying thousand of dollars per month on rent in cities like San Francisco, New York, and Seattle are working remotely but making the same salary. They are relocating to more affordable areas that are not as dense and less expensive. The Income tax rate is also very attractive.
2) COVID has sparked concerns for those living in densely populated cities as COVID has impacted densely populated areas significantly more than more spread out areas like Arizona.
3) Younger people like the options that Tucson and Arizona as a whole has while other cities are shut down. Arizona is not shut down to the degree that New York and California areas are and Arizona has plenty of outdoor activities for younger people and retirees.
Arizona as a whole outpaces the rest of the country by far when it comes to unemployment rates, economic growth and real estate activity.
Lease rate and sale price predictions:
Opportunistic markets based on 2021 predictions:
-Small bay industrial (trades related businesses that support the housing market)
-Medium to large bay industrial (last mile distribution and Ecommerce)
-Industrial land on the outskirts of Tucson but close to I-10
-Drive through retail
-Industrial with fenced yard (industrial materials serving the housing market)
The demand for office and retail nationwide and especially in densely populated cities will decrease substantially. The demand for office and retail in Arizona, Colorado, Utah, Texas, and Florida will remain steady without noticeable increases or decreases as the migration demand will offset the COVID effects on office and retail. We would also expect new retail development due to the quickly changing world of retail. Drive through developments for retail will increase and last mile will begin to pop up more in retail projects as DoorDash leases their first Tucson last mile distribution location and Amazon continues to expand, spurring other retailers to compete and sign new distribution related leases. I would expect the large big box retailers including home improvement and grocery stores to start leasing distribution spaces to adjust and compete with Amazon, GoPuff, and DoorDash.
Rumors of Amazon taking over JC Penney locations may be foreshadowing for last mile distribution.
The Downtown Tucson market as a whole seems to be hit the hardest as restaurants and bars face shut down procedures. The loss of income will have to be mitigated through rent structures and mitigation between landlords and tenants. We would expect the vacancy rates for office and retail downtown to increase and will take a few years to get back to 2019 levels. This recovery will be directly related to consumer confidence in dine in eating and whether or not office employees decide to work from home or the office. At this point all indicators and corporate decisions are pointing towards 40-50% of employees will work remotely through 2021 at a minimum.
The industrial market downtown felt some losses but has since been filled up from northwest demand that cannot be solved with limited Northwest supply.
Another trend that I’ve noticed is the baby boomer generation retiring. Lots of baby boomer business owners have been phasing out of the business for years but have not officially made the move. COVID was the last straw and made them take the last step towards retirement.
We are also seeing a lot of movement from companies that have historically had manufacturing in china. COVID supply chain issues have spurred companies to start looking at the US and Mexico for manufacturing alternatives. If more companies start to move manufacturing to Mexico, Tucson and Arizona will benefit from the supply chain shift and some of that money will move north into Arizona for vacationing and shopping. Sonora Mexico is positioned very well for this shift as they have the labor pool for manufacturing, the logistics position, and access to materials.
Do you know someone who has talked about moving their business to Tucson? Below are 9 reasons to move your business to Tucson.
Formerly, Tucson Store Fixtures, 500 Grant will now be occupied by Granite Granite, a granite countertop company. Tucson Store Fixtures has relocated to 4775 S Coach.
Max Fisher and Dave Hammack of Cushman & Wakefield | PICOR represented the seller and Ron Zimmerman of Cushman & Wakefield | PICOR represented the buyer.
For more details contact Max Fisher 520-465-9989
The Whistle Stop Depot was once a 1950's steel transport warehouse. In 2007 the transport warehouse was transformed into the iconic Whistle Stop Depot, blending historic architecture with modern amenities. It's 10 year renovations were hand-crafted using only recycled, reclaimed and repurposed materials, creating a new Tucson landmark.
-Half mile from I-10
-Large parking lot
-An abundance of outdoor entertaining space
-Two 200 Amp, 240V 3 Phase services
*Inquire about liquor license*
-Legal occupancy 300 inside; an abundance of space inside and outside for social distancing
-Events with outside occupancy of 1,000 people
-Versatile internal layout: open, clear-span space, centralized restrooms
-Solar chimney with set of oversized evaporative coolers and a "legal" cooling tower
-Four (4) commercial-rated overhead heaters
-Beverage bar; large refrigerator for alcohol storage, wine refrigerator, kegerator
-Catering prep area (3 station stainless steel sink refrigerator)
-12'x10' raised steel platform
-Inventory of on-site furnishings available upon request
-Warehouse equipped with full service AV equipment, Tech Services
-Quality and reliable internet and phone connections
-Licensed and monitored central alarm system
Contact Max Fisher of PICOR Commercial Real Estate Services for more details or to schedule a showing, 520-465-9989 call or text
Expect Tucson industrial building lease rates and sale prices to increase dramatically.
I have been watching the Coloardo, Nevada and California markets for the past few years and after recreational marijuana was passed, the industrial markets took off substantially. The increase in lease rates and sale prices has actually pushed a lot of conventional industrial businesses out of the market and into other markets like Arizona.
How HIGH can we expect prices and lease rates to rise? I think we can confidently expect prices and rates to increase by 10% at least in the 20,000 SF + warehouse markets. I don’t see the retail markets being affected too much by the new dispensaries, they will most likely backfill existing vacancies as I would expect to see more retail vacancies in 2021 as rent deferral programs become less sustainable by landlords. Of course a vaccine could change this trend.
With an increase in grow operations we can expect their suppliers to expand into the Tucson market. Think, lighting, hydroponics, packaging, etc. This demand increase will affect both the retail market and the industrial market.
There are already existing Tucson development projects (at least 600,000 SF) going on in efforts to develop needed grow facility space.
But where can we expect this demand to flow?
-Mid sized warehouses (20,000 – 40,000 SF)
-Large sized warehouses (40,000 SF +)
-Areas distanced from schools and churches for grow operations (AZ laws will most likely rule that grow operations and dispensaries will need to be a certain distance from schools and churches)
-Retail areas near venues and younger populated areas will see activity from dispensaries only. Think near the Casinos, University of Arizona, Downtown, and Pima College.
-Expect food production facility related buildings to be leased by edible manufacturers and some lower ceiling height warehouses to be converted to food production (floor drains, drop ceilings, air conditioned environments.
-We may even see more rural properties be developed from ground up and/or conversions of old dysfunctional rural manufacturing facilities be converted to grow facilities.
The laws are not yet established in Arizona so there is a lot to be determined but this is a general thought based on other markets and the past is the best predictor of the future.
Grant & I-10
-3,80 SF Trucking Terminal
-18 Dock Positions
-.3 Mile from I-10
$850,000 or $7,900 NNN
Contact Max Fisher of PICOR Commercial Real Estate Services for more info or to schedule a showing 520-465-9989 or firstname.lastname@example.org
18.3 Acres Zoned CI-2
27,500 SF Warehouse
3 Phase Power
1 Mile From I-10
Contact Max Fisher of PICOR Commercial Real Estate Services for more info 520-465-9989
Rillito Automotive purchased the Prince and I-10 sub market building and land from Orcas Triad III.
Max Fisher of PICOR Commercial Real Estate Services represented the seller and Joey Castillo of Volk Company represented the buyer.
For more details or upcoming listings email email@example.com or text 520-465-9989
Max Fisher, Industrial Properties Broker