Commercial Real Estate Outlook
February 2, 2010|AZPM
Story by Robert Rappaport
There is some optimism among local commercial real estate brokers in the new year’s infancy, but there’s still a long way to go before things recover to what they once were.
“I think we have hit bottom, especially with the commercial real estate market. What you’re going to see is we’re going to bump along the bottom, but we started seeing some sales volume start to increase specifically in the second half of last year, but rents and prices will probably begin to go down,” says Hank Amos, President and CEO of Tucson Realty & Trust.
Amos says there are a lot of offices sitting empty, as the vacancy rate remains high. “What we have now is offices about 16 percent. Retail is about 12.1 percent. Industrial is a little bit north of 11 percent.”
Industrial Broker Buzz Isaacson of C.B. Richard Ellis says while the community is still reeling from a bad 2009, it actually was worse a year before that. “In 2008, we had negative absorption in the office market of about 90,000 square feet. In 2009, we were plus about 90,000 square feet and that isn’t a huge swing, but we’re heading in the right direction."
If there is any good news, it is for tenants. Brokers say now is a good time to renegotiate leases in the downward direction, or expand without suffering much of a cost increase.
