At year-end, Tucson had 36 spaces greater than 10,000 SF available
Tucson – Retail big box leasing activity throughout the Tucson area was stifled by the on-going COVID-19 pandemic. At year-end, 36 spaces greater than 10,000 square feet were available, resulting in approximately 1.46 million square feet of vacant big box space throughout the market, according to new CBRE Research.
The 2020 levels compare to 48 spaces of that size and approximately 1.35 million square feet of large vacant retail space recorded at the end of 2019. Although the velocity of new leases signed with big box retailers was minimal last year, metropolitan Tucson did see 159,997 square feet signed in spaces of 10,000+ square feet.
Top retail box transactions in the area last year include Burlington’s 40,062-square-foot lease at Tucson Spectrum, a 22,398-square foot lease to Rock Solid and OneOncology’s 18,210-square-foot lease at 3700 E. Ft. Lowell Road. Discount retailers, such as Big Lots, DD’s Discounts and Dollar Tree also signed sizable leases in the market.
“Tucson has historically been viewed as a tertiary market by many major retailers, and with the added pandemic stress, shopping center ownerships are looking at “what now?,” said CBRE’s Nancy McClure. “Entertainment and fitness retailers were shuttered or highly limited in customer occupancy by government mandates for much of 2020. Most did not pay rent during those months with hopes to be able to hang on long enough to reopen when it is safe to do so.”
Nationally, many shopping center owners are looking to demolish all or parts of their centers to redevelop them into mixed-use projects with multifamily, medical, distribution centers and offices. Yet redevelopment can often be challenged by zoning constraints.
Property owners and experienced real estate professionals are working together to understand industry and market trends to structure deal terms that will help owners prevail in a challenging market, according to McClure.
“For vacant projects that cannot be filled with traditional retailers, property owners are looking to reinvent space,” said McClure. “Those property owners that adapt to the evolving retail landscape with the guidance from real estate advisors and with the help of data, are poised to thrive. The key is flexibility.”
She added, “As the vaccine is administered widely throughout 2021 and consumers start to feel safe returning to stores, retailers are likely to benefit from pent-up demand and a desire to get back to a sense of normalcy. We expect a certain amount of ‘revenge shopping,’ which will help brick & mortar stores’ bottom lines.”About CBRE Group, Inc.
CBRE Group, Inc. (NYSE: CBRE), a Fortune 500 and S&P 500 company headquartered in Dallas, is the world’s largest commercial real estate services and investment firm (based on 2020 revenue). The company has more than 100,000 employees serving clients in more than 100 countries. CBRE serves a diverse range of clients with an integrated suite of services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services. Please visit our website at www.cbre.com.