CBRE’s Tucson office has released its final Big Box Report of 2016. Tucson will end the year ahead but continues to struggle to meet the needs of national retailers.
According to CBRE’s Nancy McClure, Big Box retail space throughout the Tucson area saw healthy leasing activity in 2016, particularly in the 12,500 to 55,000-square-foot range.
“Over the past year, the Tucson area experienced an increase in demand for a shrinking supply of top-tier retail anchor space,” says McClure. “With nine vacant retail boxes of ±30,000 SF or more, retailers are sure to try and secure the best of the best.”
However, McClure points out that the state of the retail market is not without challenges. The first vice president points out that big box sizes often don’t meet current retailer requirements; triggering some ground-up construction and existing centers to go through major redevelopment to meet current needs.
“Expanding retailers have been focused on the top-performing trade areas and centers with category leading anchor tenants,” explains McClure. “Often, today’s retailers are seeking space of a size and quality that is unavailable in our market; because of this, Tucson has benefited from new ground-up construction with more to come in 2016 and beyond.
“Moreover, the high demand for core locations has spurred redevelopment of tired centers with antiquated layouts and floor plates—barriers to entry will always make these prime corner locations the target of developers who understand how to buy and reposition these sites for today’s retailer rent parameters.”
Looking at the year-over-year numbers, by year-end 2016 there were 31 spaces greater than 10,000 square feet available in the market, totaling 995,588 square feet of big box space. This compares to 49 spaces greater than 10,000 square feet and 959,230 square feet at year-end 2015.
“Many of the 31 vacant boxes that make up Tucson’s total of ±995,588 SF are smaller-scale at ±10,000 – ±21,000 SF,” says McClure. “Arguably, most of the smaller footprints are not in the prime targeted areas, and many are functionally obsolete.”
She continued, “Those obsolete properties may never get absorbed and the challenge moving forward is working to redevelop or construct new retail spaces that meet the current retail prototypes.”