CBRE: Tucson big boxes lease up in core locations

Tucson, Ariz. — Big-box retail space in Tucson, Ariz., has been leasing up, with the highest demand focused in core regional mall hubs. Big-box spaces in peripheral areas of the city remain vacant.

In the Park Place Mall area, for instance, big box properties are nearly fully leased, with some saying the area is ripe for redevelopment to accommodate future demand.

What does 2014 look like? The velocity of big-box deal making was steady and solid during the first half of 2013. Then activity slowed. Observers expect that some big-box retailers will decide to close or consolidate locations in 2014, which could open up some opportunities where none exist at present.

Most of the approximately 786,606 sq. ft. of vacant retail big boxes in Tucson consist of spaces between 10,000 sq. ft. and 15,000 sq. ft. There are only six vacant big boxes of 30,000 sq. ft. or larger. Most of the smaller footprints are not in core areas. Many are also functionally obsolete. The obsolete properties may require redevelopment before a retailer will lease them. Many of the large format retailers interested in Tucson require footprints greater than what the Tucson market has to offer.

As a result, new development is being planned — and some is underway, mostly along Interstate-10. CBRE said that it expects this to continue given the availability of land and assuming the new housing construction market maintains positive momentum.

Retailers that expanded in Tucson during 2013 included Wal-Mart, Burlington Coat Factory, Total Wine, JoAnn, CVS, Walgreens, Dollar Tree, Old Navy, Goodwill, Ace Hardware and others. Retailers new to Tucson in 2013 include Floor & Décor, Conn’s, Shoe Carnival, dd’s Discount, Planet Fitness and Arizona Air Time. Only two grocers have been active in the region: Whole Foods and Wal-Mart Neighborhood Market.

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