Tag Archives: Catalina Foothills

Arizona's Unemployment Rate Drops in October 2010

Employment gains drive Tucson multifamily market

Market report supplied by Colliers International

 

THE BROADER VIEW

The Tucson multifamily market got off to a strong start in 2015. Momentum from the end of last year has carried over into 2015, with vacancy improving, rents ticking higher and healthy levels of net absorption. The vacancy and rent trends are the surest signs of market strengthening. Vacancy is approaching a cyclical low, and with the pace of inventory growth slowing, the rate is forecast to continue to improve. As conditions have tightened and the economy has expanded, operators have begun to implement rent increases. Average asking rents have ticked higher in seven of the past nine quarters, and the rise in the first quarter was the strongest in nearly eight years.

CURRENT CONDITIONS

Multifamily vacancy in Tucson dipped to 8.5 percent during the first quarter, an 80 basis point year- over-year improvement and a 40 basis point decline since the end of 2014. Vacancy is trending lower in response to ongoing net absorption, which has been positive in each of the past nine quarters. The primary source for this demand has been employment growth, which has been positive in each of the past four years and began 2015 with a gain of approximately 2,800 workers. Growth has been particularly strong in the education and health services sector, which has expanded by 3.7 percent during the past year with the addition of 2,300 employees.Screen shot 2015-04-29 at 10.55.53 AMRenter demand in the Tucson metro area has been healthy, and the local vacancy rate has improved despite recent additions to inventory has expanded by more than 5 percent. This year will mark a shift in the development trend, as fewer than 500 units are forecast to come online, limiting the competitive threat from new construction. With the construction pipeline thinning and renter demand still healthy, vacancy is forecast to dip below 8 percent by year end.

Asking rents rose 0.7 percent to $643 per month in the first quarter, and the ongoing vacancy improvements are the driving force behind rent gains. This marked the fastest quarter of rent growth in the Tucson metro area since 2007, and if a similar pace of expansion can be sustained throughout the year, rents will advance in the 2.5- 3.0 percent range in 2015. Rent growth has been strongest in the northern segments of the market, with the Flowing Wells and Catalina Foothills submarkets leading the way with average annual rent gains of approximately 3 percent.

Sales activity dipped slightly to start 2015, falling 14 percent from the pace recorded at the end of 2014. The first quarter is typically a fairly slow period for transactions, and 2015 has gotten off to a stronger-than-usual start. Sales velocity in the first few months of 2015 was nearly double the average first-quarter transaction activity that has occurred over the past five years.

Following a spike of more than 75 percent in 2014, prices cooled in transactions that recorded during the first quarter of this year. The median price in the first three months of 2015 was $22,800 per unit, down from $44,900 per unit in 2014. Prices are being influenced by the mix of assets changing hands. Many of the properties that have sold thus far in 2015 are 1960s- and 1970s-vintage complexes, with smaller units on average. In addition, nearly all of the properties that have sold to date have had vacancies above the market average, providing a drag on pricing. Steady yields showcase the impact the mix of properties is having on prices. Even as prices in the few properties that have changed hands have lagged 2014 levels, cap rates have remained fairly consistent thus far in 2015, averaging in the high-6 percent range.

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CBRE Leases 12,877 SF Commercial Building in Catalina Foothills

CBRE negotiated a 12,877 SF lease for a vacant restaurant/office building at 3500 E. Sunrise Dr. at Campo Abierto in Tucson.

Five Palms LLC, an Arizona-based corporation, offering four unique dining concepts in one location, has leased the building and plans to open in November 2012, marking its first location in the U.S.

Buzz Isaacson, Nancy McClure and Ike Isaacson of CBRE’s Tucson office represented the landlord, Landmark Assets LLC of Scottsdale in negotiating the long-term lease agreement.

The tenant, Arizona Five Palms LLC of Tucson and its sole owner/operator Nino Aidi, who grew up in Europe, was represented by Thomas Sylvester of Sylvester Realty & Investments, also in Tucson. The exact financial terms of the transaction were not disclosed.

“This property is ideal for a new restaurant concept like Five Palms,” said CBRE’s McClure. “It’s premium location in the Catalina Foothills offers excellent visibility, and it’s beautiful, new interior decor and unique architecture will only enhance the dining atmosphere.”

The restaurant features four distinct dining elements. Its centerpiece is a fine dining area with a patio featuring an extensive menu offering prime steak aged in house and carved tableside, as well as fresh fish flown in daily. Patrons will also enjoy a fine bar with its own patio.

A wine and gourmet shop, Dovino, will be located on site featuring wines from 13 countries, cheese, charcutries, chocolates, a walk-in humidor with cigars and home delivery. Nino’s Bar and Grill, a casual bar, will be located on the second floor and will have a different menu than the first floor dining room, focusing on the best of old- and new-world cuisine.

Nino’s Bar and Grille will include the addition of a newly added, elevated, outdoor open-air covered terrace featuring amazing views of the surrounding mountains, La Paloma golf course and serene Tucson city lights. It is sure to be a favorite gathering spot to enjoy a relaxed meal and beverage. In addition, extensive banquet facilities for special events will be available. Catering will also be featured.

“The Five Palms Restaurant in San Carlos is a favorite of visiting Americans and Tucsonans who vacation in the beautiful Mexican beachfront resort town,” Aidi said. “Their enthusiasm for the restaurant’s fine food and ambiance is the main reason I’ve created and brought this unique concept and dining experience to Tucson.”

In addition to the restaurant in San Carlos, the Five Palms restaurant chain also operates gourmet restaurants in Obregon and Hermosillo, Sonora, Mexico.

 

Legends at La Paloma Apts

CBRE Completes $35.15M Sale Of Legends At La Paloma

CBRE Capital Markets has completed the $35.15M sale of Legends at La Paloma, a 312-unit luxury multifamily community located at 3750 E. Via Palomita in Tucson.

Senior vice president Michael Sandahl in CBRE’s Tucson office, along with vice chairmen Tyler Anderson and Sean Cunningham, and associate Asher Gunter of Phoenix, represented the seller, a fund managed by Eaton Vance Management, in the transaction, which is the largest apartment sale in metropolitan Tucson this year.

The buyer was NALS West LLC, an affiliate of Nevins Adams Lewbel Schell in Santa Barbara, Calif., which also has a regional office in Scottsdale.

Located among luxury homes and destination resorts in Tucson’s Catalina Foothills, Legends at La Paloma is a premier multi-family community offering resort-style living and spectacular mountain and city views. The community has a heated swimming pool and spa, a resident clubhouse, fitness center and outdoor fireplace, barbecue and picnic area. Individual units have spacious nine-foot ceilings, full-size washers and dryers, fully appointed kitchens, wood-burning fireplaces and private patios or balconies.

Legends at La Paloma was built in 1995 by Evans Withycombe, which developed and managed upscale apartment communities in Arizona.