The University of Arizona Office of University Research Parks (OURP) has released a new study documenting the economic impact of the University of Arizona Science and Technology Park (UA Tech Park) and its significant contribution to Pima County’…
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The City of Tucson deserves substantial credit for the way in which they now deal with Certificates of Occupancy (C of O). In the past, challenges obtaining a C of O were significant enough to devalue properties and bankrupt tenants. The current policy…
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Why should a business owner use a broker to represent them in their search and negotiations for office space? While we are focused here on office requirements and handle Tucson commercial real estate, the same principles apply for businesses looking to lease industrial or business park space, medical office, and even retail or shop space in Tucson or beyond.

1. A Tenant Broker will save you time. They will review your space requirements and determine which available buildings and locations best meet your needs so you do not waste time considering potential spaces that don’t meet your needs.
2. At the same time, the Tenant Broker will show you every property available that meets your leasing requirements. By doing so, competition is created among landlords, allowing you to get the best rate and terms. 
3. The Tenant Broker advocates for you. They know the issues that arise in lease negotiations and navigate the pitfalls on your behalf. 
4. The Tenant Broker has a working knowledge of the proper forms and documents used in real estate transactions and will guide you through the entire procedure, advising you what and when to sign, and equally importantly, what not to sign.
5. The Tenant Broker serves as an impartial third party in the negotiating process. Keeping emotion out of the discussions and representing your interests without “showing your cards” brings value in achieving the most favorable outcome with the prospective landlord.
6. The Tenant Broker works to ensure you lease just the amount of space you really need by bringing a critical eye to the space planning and layout process. The landlord or developer has no incentive to economize on your space requirement, so representation on your behalf matters. 
7. The Tenant Broker examines the preliminary pricing of the build out of improvements to ensure you maximize the value of your improvement allowance.
8. The Tenant Broker will be able to identify lease provisions that potentially save you money or cost you money over the lease term. Many seemingly innocuous lease provisions can have a costly impact and are often overlooked. 
9. The Tenant Broker is paid by the landlord, and compensation is built into the market rates quoted in the real estate community. You will likely not save money by going without representation; however, you can save money when your interests are protected and represented by an experienced and knowledgeable negotiator. 
10. The Tenant Broker will be available to inform and may be able to help settle disputes arising after the lease is in effect. They will maintain documentation which often proves valuable during the term of the lease. 
11. The Tenant Broker can be the “bad guy” during negotiations, protecting your direct relationship with the landlord, even though you may have achieved many beneficial economic concessions.
12. With the Tenant Broker taking the lead on space search and negotiations, you have more time to focus on your business. Real estate transactions are very time consuming and require constant attention.

Surely there are more. What benefits have you found in being represented by an industry expert that we may have overlooked?

Tom Nieman, specializing in commercial real estate since 1977, possesses a diverse background in brokerage, development, and management. He joined PICOR in 1995, focusing on the office, medical and investment markets, becoming a Principal in 2001. He excels in providing the best solutions to the real estate requirements of developers, landlords, tenants and investors. 

Photo credits: Lloyd Hobden, Hollywood Today, Gary Rumack Photography 

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This week Prologis, global leader in warehouse development and ownership, forecasted a 12-18 month ramp up in absorption of warehouse space, largely driven by production and trade increases. We asked how Tucson warehouse space fares in the market place and whether the recovery locally will track the global and U.S. forecasts.

Despite minimal demand for new warehouse space in Tucson in recent years, we see a slight increase in activity and interest. Tucson is well positioned to support a rebound in demand, with rail-served properties like Century Park Research Center hosting approximately 600,000 available square feet of high cube, high dock, 30′ clear warehouse space.

Here is the broader perspective, reported by CoStar Group:

Warehouse Demand Expected to Exceed Pre-Recession Peak in 2012

Prologis Expects Logistics Property Recovery Will Ramp Up Over Next 12-18 Months

Prologis, the world’s largest developer and owner of warehouses, expects the recovery in logistics real estate will accelerate through 2012, with an upswing in production, trade and inventories translating into nearly 400 million square feet of positive absorption globally next year. 

Even taking into account the economic soft patch earlier this year caused by rising oil and commodities prices, the debt crises in Europe and the U.S., and the natural disasters in Japan, the U.S. recorded the strongest second-quarter net absorption of logistics space in four years, according to the San Francisco-based global firm. 

“The recession has been deeper and the recovery has been slower than anticipated, however, the global economy and the logistics real estate market are on track for a stronger rebound in the second half of 2011,” followed by even stronger growth in 2012, said David Twist, vice president, Prologis research, in the report titled, Recovery Continues For Logistics Real Estate. “We expect to see increased demand for modern logistics space over the next 12 to 18 months.” 

The forecast dovetails with a similarly bullish-though-tempered outlook for the sector by CoStar, which notes that the climate for warehouse demand, as gauged by the shoring up of retail sales, manufacturing output and trade, has improved markedly since this time last year. 

Systemic shocks such as oil price volatility and supply chain disruptions in the first half, combined with recent stock market turmoil, led CoStar to lower its near-term expectations for warehouse absorption — and consequently, lower its outlooks for rent and value growth, according to recent analysis by CoStar Senior Real Estate Economist Shaw Lupton. Other ongoing factors such as shadow supply and oppressively low housing starts could also hold back warehouse demand, but despite the tempered outlook, the main takeaway remains the same, Lupton said. 

“Now is an excellent time to invest in continued economic expansion by gaining exposure to warehouse properties,” according to Lupton. “We remain cautiously optimistic that the pace of absorption will improve in coming quarters.” 

Prologis likewise muted its original forecast for global net absorption in 2011 from a solid 165 million square feet to between 125 and 165 million square feet. Some growth that was previously expected this year will be pushed out an additional quarter or two. 

“We expect net absorption as a percent of stock to surpass its pre-crisis peak level in 2012, though availability will be higher than it was at peak due to the delivery of new product in the early part of the downturn,” Prologis said. 

Trade is almost 2% above its pre-crisis peak, fueled by rising consumption and record levels of exported goods, Prologis said. Imports in the first half of 2011 were up more than 7% over the same period last year and poised to surpass their prior peak in the second half, driven by growing global consumption and trade. 

In the first two quarters of 2011, inventories were up 3.4% over the same period last year, despite slower economic growth and consumption. With U.S. trade and consumption above prior peak levels, inventories will need to grow faster, from unsustainable and near-record lows, in order to keep pace in the second half, Prologis said. 

Russ Hall joined PICOR in 1992 after a nine year tenure with Grubb & Ellis. He is a company principal and consistent top producer, specializing in addressing the leasing and sales objectives of project owners and developers, selling of investment properties, assisting users in site selection, and identifying and promoting prime development opportunities. 

Photo credits: Preston City Council, Gary Rumack Photography

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If successful, Tucson’s Modern Streetcar presents opportunities for transit oriented development with myriad benefits. Early this year the Federal Transit Administration granted final approval of a $63 million dollar grant to help fund the overall $197 million cost of Tucson’s Modern Streetcar project. As of June 6th, planning is nearly complete and the 3.9 mile line is expected to go into service in 2013. The line will run from the Mission Gardens area west of Interstate 10 and Congress St, through the Central Business District, along Fourth Avenue to University Blvd, through the University of Arizona campus, and on to the University Medical Center. The streetcar line will link residential, commercial, employment, governmental, and educational activity centers in order to mitigate parking needs, improve non-vehicular connectivity, generate private development, and support population and employment growth.

Why do we need a streetcar when we already have buses?

There are two principal reasons that modern streetcars work:

1. You cannot re-route a streetcar. A streetcar system is a fixed guideway transportation system- it runs on permanent rails. Unlike a bus, once a route has been chosen and the public investment has been made, it cannot be changed. The permanent nature of the routing is what helps attract private investment. The private investor/developer knows that the route cannot be changed so therefore his investment is safe.
2. Buses are stigmatized. Our society is in love with the automobile. The bus is widely considered to be the transportation option for someone who cannot afford an automobile. Buses are seen as downscale and many people strongly resist taking the bus. Streetcars on the other hand have an attraction in our mindset. We see streetcars as a sophisticated urban transportation system. Streetcars attract people from all socio-economic strata and have a wider appeal.

So what can we expect from our new modern streetcar system?

Increased property values and increased private investment. 

Values: Properties within 1/4-1/2 mile of streetcar lines (easy walking distance) increase in value.

• San Francisco residential values increased by 10% at BART stations
• Portland increased property values 11% within 1500’ of a station
• Santa Clara increased commercial property values by 23% along their rail line

This represents a LOT of money. Given a 1/4 mile radius around each of the planned 18 stations on the streetcar line, this represents a 10% to 20% direct increase in property value to over 1,335 acres of Tucson(over two square miles).

Private Investment: The permanent, fixed guideway, rail system attracts private money. This type of infrastructural investment cannot be changed or moved. Investment in transit oriented development will help to invigorate and revitalize areas of Tucson that have long been plagued with vacancy and low property values. Return on investment? The Portland streetcar system attracted an estimated $2.5 billion dollars in private investment based on an $89 million dollar public investment. The increased construction and elevated property values will positively impact the tax rolls for many decades.

Risks and rewards

That’s how it works. We make a permanent investment in our transportation infrastructure and the private market responds by revitalizing and rejuvenating some challenged areas of our community. The citizens (approximately 100,000 live within ½ mile of the modern streetcar line) benefit from an easy, cheap, and clean transportation mode to go to and from work, home, and entertainment.

What are the risks? When making the massive investment that a modern urban rail system requires, other municipalities have reworked land use plans and zoning to accommodate private investment. Population density and more intense commercial development are a “must” if we are to realize the return from our public investment. Compact, mixed-use, high density development must be facilitated along all sections of the streetcar route. Failure to actively plan for this investment will result in a modern streetcar that is little more than a novelty. Successfully planning for the upcoming flood of private investment dollars will ensure that future generations will benefit from our investment today.

Compact, mixed-use, high density development must be facilitated along all sections of the streetcar route. Failure to actively plan for this investment will result in a modern streetcar that is little more than a novelty. In a recent Inside Tucson Business article, Councilman Steve Kozachik states the case for zoning in advance of construction. Planning for optimal economic development along the route will best capitalize on private investment dollars, ensuring that future generations will benefit from our investment today.

Rob Tomlinson has been clearly focused on the needs of retail landlords and tenants for over twelve years. With valuable insight on the dynamics of the site selection process, experience with assemblages, and education in Urban Geography, Site Analysis, and Land Use Planning, Rob brings an informed perspective to challenging sites. A CCIM Candidate and International Council of Shopping Centers (ICSC) member, Rob has countless hours on land use commissions and committees and public/private development efforts.

Sources: David M Taylor, CNUSenior Vice President National Director, Sustainable Transportation Solutions david.taylor@hdrinc.com and City of Tucson Department of Transportation

Photo sources: Tucson Modern Streetcar, Regional Transportation Authority, Google Earth, Gary Rumack Photography

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Start counting.  Each day for the next 18 years, 10,000 people are turning 65 years old. The message is loud and clear: We are aging fast. Not surprisingly, the implications of this demographic trend for the health care industry and medical p…
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The Tucson Apartment Investment market is beginning to wake up. Lender owned properties (REO properties), short sales, and sales through receivership are hitting the Tucson market in addition to a few non-distressed properties. PICOR is currently marke…
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La siguiente información es un resumen del articulo “7 Razones para Invertir en Sonora, México” publicado en PICOR Connect el día 2 de Junio 2011.
Sonora, el estado Mexicano fronterizo con Arizona, representa una multit…
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Sonora, the Mexican state bordering Arizona to the south, represents a multitude of established and emerging opportunities for businesses and investors stateside. Here we will highlight some of the leading industries and factors contributing to Sonora’…
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In the midst of ICSC’s RECon, the retail real estate industry’s largest deal making event, statistics continue to support the relationship between retail sales and the demand for industrial real estate. That being said, local growth remains tepid. Howe…
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Going intermodal: Among the many quality industrial real estate options available to Tucson businesses, with its rail-served warehouse and manufacturing facilities, Century Park Research Center stands out as a unique option.
What differentiat…
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Highlights from our first quarter 2011 office market presentation at the Pima County Real Estate Research Council on May 5, 2011.
Tucson Office Market Fundamentals

Tucson office vacancies are above ‘normal’ by four points (12.4%) and up 0.3% over 4Q 2…
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Forgive us a little self promotion…

Every year since entering the Tucson market in 2005, CoStar, commercial real estate’s leading provider of information, analytic and marketing services, has recognized the top firms and individuals with t…
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As the recovery slowly continues and the dust settles, we are seeing some clear and notable patterns. While overall Tucson vacancy rates have climbed from an all-time low of 3.1% in 4Q 2005 to a high of 8.8% in 1Q 2011, not all properties have far…
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The Tucson apartment investment market is enjoying improved operating fundamentals and renewed interest from investors as confidence returns.
Operating Environment:
Tucson continues to enjoy a gradually improving rental market, as evidenced by a first …
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For those considering solar commercial property in Arizona, Tucson’s Solar Zone, a 250-acre park established within the University of Arizona’s Science and Technology Park, is a leading hub for solar power generation, distribution, research and develop…
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In 19 years tracking the Tucson industrial market, business park occupancies peaked in 2007 at 94.9%. What does the 2010 trough of 82.0% (second only to 1992 by a hair) tell us about the state of business expansion and contraction in the Tucs…
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As simple as it seems, this can be a very difficult question, whether you seek Tucson office space or another type of commercial building.  Every business is different…yet the factors affecting this decision are pretty constant.  A good pla…
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A short history…PICOR began quietly, as a humble Tucson commercial real estate boutique firm in 1985. Back in the day, our founder gave a sly smile when anyone would say, or imply, “who are these guys?” Never seeking to dominate the market–only to d…
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