News of Our Recovery Is, Well, Newsworthy at Last!
February 27, 2013
Inside Tucson Business Editorial:
At last, a positive check-up
Posted: Friday, February 22, 2013 6:00 am
By Inside Tucson Business | 0 comments
The difficulty with living through historic or life-changing moments is that you don’t notice or feel them so much as they’re happening. It’s only in looking back and analyzing a situation and its ramifications that the significance can be recognized.
As we all continue to look for signs of a recovering economy, the special section in last week’s (Feb. 15) issue of Inside Tucson Business reviewing Tucson commercial real estate sectors and how they fared in 2012 offered solid glimmers of positive trends.
Under a recurring theme of “good enough,” it might not have seemed like much for those who were accustomed to the way things were before the Great Recession. But let’s face it, the word “good” hasn’t been a part of the lexicon for Tucson real estate in five years.
Thanks to the University of Arizona’s plans to grow student enrollment by another 10,000 to 50,000 by the end of the decade, student housing developments are driving the recovery in commercial real estate, at this point with nine projects in various stages of planning or construction and due to be completed by 2014. Even more impressive, major U.S. firms that in the past would have skipped over Tucson are involved in these developments.
Along with the residential developments come the ancillary support services and infrastructure, not the least of which is Sun Link, the modern streetcar that will connect the UA area with downtown and everything in between. We continue to hear from naysayers who argue the streetcar doesn’t do anything for them. For those who say that, this may come as a shock but the streetcar is not for you.
Right now, Sun Link is a linkage for students who are going to be the immediate force behind the growth of consumer spending in this region. In due time, that will expand and more of the rest of us might become users of things such as Sun Link.
Going hand-in-hand with the projected growth is the state of Tucson’s retail sector. As was noted in Inside Tucson Business’ end-of-the-year review in December, the fact that revitalization of downtown is actually happening – after 40 years of fits and starts – was the region’s biggest news event last year and much of that has to do with investments by retailers.
The revitalization of an old Mervyn’s store at the northeast corner of Broadway and Craycroft Road into the Benenson Retail Center was the single-biggest event in the retail real estate market in terms of capital improvements. There were also major retail commercial real estate transactions – including the $125.4 million sale of the Tucson Spectrum Center, at Interstate 19 and Irvington Road, and the $29.5 million sale of The Corner, at Oracle and Wetmore roads – that show renewed confidence in the region.
There were even a few significant transactions of land for housing developments. While home building is still years away – if ever – from returning to the time when it was the backbone of Tucson’s economy, the land sales are positive indicators.
Signs weren’t so positive in the office sector of commercial real estate but that has as much to do with the uncertainties coming out of Washington, D.C., as it did anything locally.
And the sector for industrial space is primed and ready to deliver, just as soon as a manufacturer or user is ready to expand.
Yes, the commercial real estate special section was like an annual physical by a doctor covering numerous important points. In this case, the doctor was reporter Roger Yohem, who orchestrated the compilation of information that provided a status check on the region’s economy through commercial real estate.
The prognosis: the pulse is beginning to beat harder, color is coming back and vital signs are improving. It’s going to take time to become healthy once again but at long last the positive signs are there.
We all know now the Great Recession was something of historic proportion. We can now also begin to see that at long last, there are signs it is coming to an end.