Our Top Posts and the Gems You May Have Missed

In the spirit of our esteemed commercial real estate blogger colleagues, we highlight the top posts of the year and a few gems you may have missed.

TOP FIVE POSTS OF 2012

1. Redefining Relevance for Brick and Mortar Retail Stores – a quality guest post on repositioning in the age of e-commerce

2. Women in Commercial Real Estate: High Time We Bridged the Gap – also the most commented post in our blog’s short history since the launch post

gems

Those rounding out the top 5 show the market has an appetite for expense information, reinforcing our belief in the value of a sound property management team and quality data:

3. What Mad Men Should Know About Office Operating Expenses

4. Operating Expense Trends in Retail Space

5. Current Industrial Operating Expense Trends

THE BEST POSTS YOU MAY HAVE MISSED

And for those of you who were up to your eyeballs grinding your transactions to completion, these were the posts our humble editor felt deserved more readership than they received, so take a moment to check them out:

How We Celebrated National Philanthropy Day – by donating $49,000! Read about our recipients

The Arizona-Sonora Region: Commerce Blossoms – From Tucson to ambos Nogales to Hermosillo, Sonora — read on.

Tucson: Where Solar, Optics & Innovation Shine – Optics Valley, Science City…Why Tucson? Read on…

Economic Stimulus: Fee Credits for Pima County – Read how Metropolitan Pima Alliance’s stellar efforts save Tucson area developers and property owners thousands on sewer connection fees.

A Tribute to our guest bloggers

Lastly, we thank our many guest authors who contributed quality and thoughtful content to our blog in 2012:

Vance Falbaum, RBC Wealth Management 

Christopher T. Moyer, Cushman & Wakefield Equity, Debt & Structured Finance

Michael Lagazo, Commercial Real Estate

Bruce Wright, University of Arizona Office of University Research Parks 

Michael Varney, Tucson Metro Chamber 

All the best in the new year to you from our Cushman & Wakefield | PICOR Commercial Real Estate family to you and yours.

What topics or guest authors would you like to see in 2013? Let us hear from you – comment below!

Barbi Reuter TucsonBarbi Reuter, RPA oversees Cushman & Wakefield | PICOR’s operations, research, finance and marketing/social media activities and serves as Associate Broker. One of 13 company Principals, she is active in industry and community leadership, through such organizations as Commercial Real Estate Women (CREW), Greater Tucson Leadership, Arizona Town Hall, and board work for the Tucson Girls Chorus and PICOR Charitable Foundation. In 2012, she was named a Woman of Influence by Inside Tucson Business.

 

Photo credits: www.jewelinfo4u.com, Lyn Sims Photography 

 

Don’t Panic About the Fiscal Cliff (Guest Post)

You can hardly watch a business newscast or read a business publication these days without a reference to the looming “fiscal cliff” – that precipice at which $1.2 trillion in spending cuts are made while Bush-era tax cuts expire.

Fiscal cliff CongressIt’s a scary thought, one that has some speculating that the U.S. economy would automatically tumble back into a recession. As an investor, you may fear that your portfolio would fall along with everything else. Should you strap on a financial parachute in anticipation of that day in January?

The biggest danger may be overreacting, making moves that are driven out of fear rather than logic. A financial advisor who takes a conservative, long-term approach to building your investment portfolio is a great ally in maintaining the calm, reasoned perspective needed to avoid panicky decisions.

While each person’s situation is different, most of us benefit by diversifying our investments. Even if the White House and Congressional leaders cannot work out a solution before reaching the fiscal cliff, not all investment classes would suffer. That’s why it’s essential that you spread your dollars among a wide array of assets—stocks, bonds, mutual funds, government securities, certificates of deposit and so on. While diversification can’t guarantee a profit or protect against loss, it can boost your chances for success and help reduce the impact of volatility on your portfolio.

Next, let’s consider the capital gains and dividend tax issues. For the past several years, qualified dividends and long-term capital gains (“long-term” meaning assets held for more than one year) have been taxed at a maximum rate of 15%. Unless Congress intervenes, starting in 2013 those dividends will be taxed at your individual income-tax rate and the long-term capital gains will be taxed at 20%. Also, depending on your income level, your dividends and long-term capital gains may also be subject to an additional 3.8% Medicare tax.

As of this writing, we don’t know for certain if those changes will occur. In the face of that uncertainty, the main criteria you should consider is what makes sense for your overall investment strategy, regardless of what Congress does. So, if selling those long-term holdings is a good idea for other reasons, doing so now at least guarantees you’ll get the 15% tax rate. If they are assets that you acquired as part of a buy-and-hold strategy, selling them now may not be prudent.

Regarding the dividend-paying stocks, you may want to shift some of them into your traditional IRA, in which your earnings can grow tax-deferred, or your Roth IRA, where earnings grow tax-free, provided you’ve had your account at least five years and don’t start taking withdrawals until you’re 59-1/2.

Another possible move if you’re in a higher tax bracket: You could benefit from owning municipal bonds, which generates interest that is free of federal taxes and possibly state and local taxes as well.

It’s always smart to be aware of the larger political and economic environment as you consider your financial situation. You just don’t need to let the frantic news accounts drive your decision-making.

Vance Falbaum RBCThis article is provided by Vance L. Falbaum, CIMA®, a Financial Advisor at RBC Wealth Management in Tucson, Arizona, and was prepared by or in cooperation with RBC Wealth Management.  The information included in this article is not intended to be used as the primary basis for making investment decisions nor should it be construed as a recommendation to buy or sell any specific security. RBC Wealth Management does not endorse this organization or publication. Consult your investment professional for additional information and guidance. RBC Wealth Management does not provide tax or legal advice.

 

RBC Wealth Management, a division of RBC Capital Markets LLC, Member NYSE/FINRA/SIPC

Photo credit:  Henry Makow

Is a Balanced Retail Market in Reach?

Metropolitan Tucson’s unemployment improved, ending at 7.6% in August versus 8.6% the previous August and better than statewide unemployment which remained at 8.3%. The state of Arizona is currently ranked sixth in the nation in job creation, boding well for progress locally.

While job creation will be the primary driver of overall market health in Tucson, the housing market shows signs of continued stabilization, with positive downward trends in foreclosure notices and trustee’s sales. Median September 2012 sales were up 25% year over year.

RETAIL MARKET OVERVIEW

RetailMinimal change occurred in the Tucson retail market during the third quarter. Vacancy edged to 8.6% on virtually flat absorption of negative 9,031 square feet (sf). On the positive side, asking rents increased from $14.45 to $14.72 per square foot (sf), with rents highest in the southeast submarket and lowest in the west.

The Hispanic shopper’s importance to the Tucson retail market continues to grow, with influence from both sides of the Arizona/Mexico border. Curacao, a consumer electronics and appliance chain catering to Spanish speakers, opened a 90,312-sf store after choosing to wait out the recession. Mexican shoppers spend approximately $1 billion in Tucson stores and restaurants each year, according to the Metro Tucson Convention and Visitors Bureau.

Tucson Retail Market 2012Active and expanding retail sectors include fitness retailers (Chuze, Planet Fitness and LA Fitness all taking down new locations), mattress dealers (Mattress Firm and BedMart), as well as 
expansion in the food service business, from fast food to fast casual and sit down. Such activity is an early indicator of increased consumer confidence. “Better burger” chains such as Smashburger, Five Guys, Culver’s, and Freddy’s Steakburger are all opening new locations in Tucson. Other new retailers to the market include Conn’s Electronics and Buy Buy Baby in the former Linens ‘n Things space at Foothills Mall. Walmart remains active in the region, opening at The Bridges at Ajo and Kino and developing a Neighborhood Market format on the eastside at Broadway and Camino Seco.

Investment sales of retail centers show improvement in price per sf, with first half 2012 sales prices at $152 psf, up 15% over the same period in 2011.

OUTLOOK

Despite a fairly flat quarter with regard to underlying market fundamentals, Tucson is gradually moving toward a more balanced retail market. Concessions are less generous than in recent years, and tenants wield less leverage, while they still have the upper hand. Expect University-area student housing developments and the 2013 completion of the Tucson Modern Streetcar to drive related retail interest along the route.

With Amazon and other internet retailers now required to pay sales tax in California, progress may be made toward a national solution, a move heralded by brick and mortar retailers here and throughout the nation.

 



Download MarketBeat Report

 

Click here for a map and glimpse of statistics in major industrial markets around the U. S., courtesy of Cushman & Wakefield.

For more information on the Tucson retail market, please contact one of our market-leading specialists or visit our website to search properties and learn more about PICOR’s retail real estate services.

 

Data source: CoStar Group

Photo credit: Ohl.com