Editor ’s Insights: Headwinds Make 2023 a Challenging But Rewarding Year for Tucson

April 24, 2023 – An exciting May Industrial issue of TRENDreport is out today. Despite economic headwinds, the pace of change will not ease. Industrial real estate will probably be the most resilient sector, and the housing shortage will undoubtedly benefit the multifamily industry. High-interest rates and supply chain challenges will make 2023 a challenging year for construction and commercial real estate growth. Weakening fundamentals and higher costs for everything will lower asset values in general.

Our 2023 Industrial issue details the major trends that will dominate the year.

Despite fewer starts, construction activity remains strong, maybe the strongest it’s ever been, with 1.8 MSF scheduled for delivery this year. With consistent demand for construction jobs and backlogs growing, more contractors are raising their bid prices and remaining competitive. This has kept many construction projects “in planning stages” since a high demand for construction workers in a tight labor market will likely persist into the rest of the year.

We are happy to have the insights from our major industrial developers in this issue, such as Lincoln Property Company’s John Orsak, Cooper Sutherland of Schnitzer Properties, and Tim Healy as Flint Development’s representative. These developers stand out as visionaries in the industrial sector. Here’s the good news: As visionaries, they also love challenges. They also share a contagious optimism for Arizona on a regional and local level.

Gordon Wicker, MAI, and President of Quality Valuation, Inc., brings his perceptiveness as a real estate appraiser to “the exciting times ahead for the Old Pueblo.”

The relevance of Tucson is underscored in this issue, not only for our proximity to the border, as Jose Dabdoub points out in his cover article. But also, as Ian Turner with Commercial Industrial Arizona Advisors brings to our attention, there is a coming of age in the American factory business. “America is Back in the Factory Business,” Ian says, quoting a recent Wall Street Journal piece.

Industrial development drives economic growth and attracts additional investment from other sectors to our region, including retail, multifamily, and single-family development. This is why Joe Snell and his team at Sun Corridor work tirelessly to bring not only an industry but the suitable types of industry to our region. As Joe emphasizes, 
“Economic development is a team sport.”

Staying with a team sports analogy, Danette Bewley, President/CEO of Tucson Airport Authority, updates readers on the Airfield Safety Enhancement project at Tucson International Airport. It is a long-running construction project that may take us into 2028 and beyond, depending on grants. But the $400+ million project (in 2023 dollars) will transform TUS to meet the latest safety standards by the FAA. As a regional catalyst, our airport generates $8.3 billion in economic activity for our region annually. We all will continue to watch this project with pride as it unfolds.

Leigh-Anne Harrison with Chasse Building Team in Southern Arizona remains cautiously optimistic for industrial growth while discussing details of supply chain challenges caused by natural disasters, the Ukraine/Russia conflict, significant demands, skilled labor shortages, and truck drivers, which are driving up costs and lead times.

A specialist in industrial sales and leasing, Max Fisher with BRD Realty, hit the bullseye when he says, “Record-low vacancies, record-high construction costs, interest rate hikes, and a grid-locked market are the trends to follow in the 2023 industrial market.” Amen to that!

To all who helped with this Trendreport issue, we extend our sincere thanks. These noted individuals sharing their knowledge and time made these reports possible by these noted individuals sharing their expertise and time.

We also thank the Trendreport team: Patti van Leer, Michael Rossmann, Melissa Vucijevic, Jack Paddock, and Cindy Erwin, our Sales and Marketing Specialist. 

We’ll start working on the upcoming annual “MPA Common Ground Awards” issue immediately.

We also thank you, our readers, for your continued support. As always, we appreciate your feedback and welcome your comments!

Please get in touch with us if you’re not yet receiving TRENDreport. Read the full Editor’s insight here.

Karen Schutte
Managing Editor,

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