Industrial properties are seeing renewed interest from out-of-state businesses

Real estate group: Retail vacancies up; churches making notable buys

Walmart may join Costco near Kino, I-10

Dale Quinn Arizona Daily Star | Posted: Friday, May 6, 2011 12:00 am
Construction of a new Walmart near South Kino Parkway and Interstate 10 could begin by the end of the year.

The discount retailer would join Costco Wholesale as an anchor tenant at the shopping center called Tucson Marketplace at the Bridges. The shopping center makes up the retail component of a mixed-use project that includes the University of Arizona's planned Bioscience Park.

Bruce Wright, the UA's associate vice president of research parks, told a group of real estate professionals at a forecast event Thursday that city officials are currently reviewing plans for the Walmart.

The retail center, developed by Retail West Properties LLC and Eastbourne Investments, is part of a larger project called The Bridges planned to include homes built by KB Home and Lennar, along with the UA bio park, Wright said.

Wright didn't mention any specific bioscience or technology companies that have expressed interest in locating at the park.

"We are in active conversations with a number of prospective tenants," he said. "Most of them wanted to see the infrastructure in place before they entered into serious negotiations with us."

Thursday's quarterly meeting of the Pima County Real Estate Research Council, held at the Tucson Association of Realtors, 2445 N. Tucson Blvd. also included updates on various market sectors:

Retail
Overall vacancies in the first quarter of 2011 were at 8.9 percent, said Craig Finfrock of Commercial Retail Advisors. That's up from about 8 percent two years ago, he said.

Rents have dropped to $14.96 per square foot from $18.62 per square foot back in the second quarter of 2009, Finfrock said. But even that can depend on location.

"Some prime locations have really held up their rates exceptionally well," especially those with storefronts that face major intersections and roads, Finfrock said.

Industrial
Industrial properties are seeing renewed interest from out-of-state businesses, said Ron Zimmerman of Grubb & Ellis.

"Transactions are happening," he said.

Zimmerman said he's again seeing clients from Albuquerque and Los Angeles. But it's still a buyer's market, with many financially distressed, bank-owned properties for sale.

And there's more of that on the horizon. "I do see more foreclosed buildings coming on the market," Zimmerman said.

Land
The land market is incredibly segmented, said Jim Marian of Chapman Lindsey Commercial Real Estate.

A bidding war can emerge for a property on the northwest side, while a property southeast of Tucson will see little activity, Marian said.

Churches have made significant purchases lately, he said. The Church of Jesus Christ of Latter-day Saints recently scooped up property in Green Valley and Sahuarita, for instance.

And the land that is selling is going for much lower prices than it did in previous years, Marian said.

Contact reporter Dale Quinn at dquinn@azstarnet.com or 573-4197.

Source:  http://azstarnet.com/business/local/article_d88e9d0b-0599-5a3b-bb62-520f05b2c154.html