For the second consecutive month, lenders and banks owned more
than 2,000 homes in the Tucson region that have not yet been listed
for sale. These pre-market real estate owned (REO) homes, referred
to as “shadow inventory,” are up 35 percent since January.
New data from Tucson Foreclosure Source showed the REO inventory
totaled 2,018 homes in September. Neighborhoods in the southern
parts of the city had the largest shadow inventory at 843 homes,
followed by northwest Tucson with 342 (see chart).
Except for a slight dip in July, pre-market REOs have increased
steadily since January when there were 1,498 units. In August there
were 2,020 homes.
Among active listings, there were 869 foreclosures and 788
short-sale units in September. Together, the two categories made up
68 percent of all homes listed for sale.
Looking ahead 10 to 12 months, local job creation remains the
key to recovery.
“As housing prices become more accessible, employment will be
the primary engine driving Tucson’s real estate economy,” said
Bryan Hill, owner of Tucson Foreclosure Source. Homes in the region
are now selling at price levels last seen in February 2001.
Regarding September sales, Hill said about 730 of the 1,050
closings he tracked were foreclosures and short sales. Most of
these distressed properties were in the city’s southern
neighborhoods where about 280 homes sold. The second most-active
area was northwest Tucson with about 150 sales.
Airport area sells
To no surprise, neighborhoods near Tucson International Airport,
which have the most distressed homes for sale at 280 units, sold
best in September.
In the 85706 zip code, mostly southeast of the airport, 55 of 96
listed homes sold for a sales ratio of 57 percent. To the west,
basically between Interstates 19 and 10, zip code 86756 was the
second-best selling area where 43 of 93 homes sold, a 46 percent
rate.
Third-best, at 43.5 percent, was zip code 85746 where 51 of 117
listings sold. The zip code is on the far southwest side in the Ajo
Way-Mission Road area
Since January, home sales have averaged 1,093 per month. During
2010, the monthly average was about 940 homes. For September, the
value of all homes sold was $160.3 million.
As for inventory, zip code 86718 in the Catalina Foothills had
most listings at 286 homes and to the east of it, zip code 85750 in
the Sabino Canyon area, was the second-highest with 258
listings.
The third highest was the 85739 zip code with 249 homes. It’s
the area along North Oracle Road area from Catalina State Park to
the junction of state routes 77 and 79.
The listings and sales data are from the Tucson Association of
Realtors Multiple Listing Service.
Although prices continue to fall, it is taking longer to sell
homes. Coldwell Banker Residential Brokerage reported the average
sales period increased to 100 days in September from 94 days in
August. The average was 90 days in September 2010.
Within the Tucson city limits, the selling price per square foot
fell to $79 in September from $83 in August. The September drop is
down nearly 16 percent from September 2010 when the selling price
per square foot was $94, according to Coldwell Banker.
RV center defaults
A large recreational vehicle and storage center in Marana has
defaulted on a $6 million note and is scheduled for foreclosure
sale in January. The complex, located on two parcels in the Orange
Grove Interstate 10 Plaza at 6260 and 6275 N. Travel Center Drive,
is being foreclosed on by Bank of Oklahoma, according to public
records.
Businesses at the site include Lance’s RV Center and a
climate-controlled RV facility, capable of storing 300 motor homes.
The complex is affiliated with National RV Central, owned locally
by NSS RV Central OG Limited Partnership, 535 N. Wilmot Road, Suite
201. According to the Pima County Assessor’s office, the taxpayer
of record is the Schomac Group, 6418 E. Tanque Verde Road, Suite
105.
Built in 2006, the site also includes a retail store, car wash,
and commercial parking lot. The trustee’s sale is set for 10 a.m.
Jan. 12 at the law offices of Quarles Brady, 1 S. Church St.,
Suite 1700.
Apartments improve
If conditions hold, the multi-family sector in Tucson will
record its best year since 2008. Although not a blockbuster
performance by any means, apartments appear headed to a net
absorption of about 1 percent for 2011.
“Citywide vacancies, which stood at 9.4 percent at the end of
the first quarter, dropped to 9.1 percent for the third quarter.
This is the lowest vacancy rate since the 2008 first quarter,” said
Bob Kaplan, a principal and apartment specialist with Picor
Commercial Real Estate Services.
Over the past three years, 2008 ended at about 11 percent
vacancy, 2009 ended at about 12 percent, and 2010 was at about 10
percent. The 2011 third quarter had a positive absorption of 941
units.
Retail rolling
The region’s retail real estate sector continued a tedious
progress toward stabilization during the third quarter, posting
positive absorption of about 47,000 square feet.
“As pent-up demand and stabilizing rental rates continue to
converge, positive absorption should continue in the Tucson retail
market,” said Greg Furrier, a principal with Picor Commercial Real
Estate Services. “With the holiday season approaching, the sector
expects to see a stronger fourth quarter than 2010 and end the year
with healthy positive absorption.”
Year-to-date, absorption is a positive 226,000 square feet for a
vacancy rate of 8.7 percent. Although the second quarter vacancy
mark was 8.6 percent, some 100,000 square feet of new space was
delivered to the market since then. Basically, new leases have kept
pace with new construction, Furrier said.
The expansion of QuikTrip into the Tucson market now includes 12
sites. Paradise Bakery Café opened during the quarter and is
planning another location. Skechers entered the market re-purposing
a vacated video store and Verizon Wireless increased its presence
in the market with a new location near the University of Arizona
campus.
Maracay opens Preserve
Maracay Homes has opened Dove Mountain Preserve in Marana,
offering four home products ranging in size from 1,660 to 2,088
square feet. The Energy Star-certified builder has 61 sites,
offering homes up to four bedrooms and three bathrooms.
The community’s basic price points run from $198,000 to
$222,000. Dove Mountain Preserve is located at 12222 N. Golden
Mirror Drive, just off Tangerine Road on north Dove Mountain
Blvd.
Sales and leases
• Elcara Xtra LLC purchased 48,720 square feet
of land for $346,500 at 7750 N. Oracle Road from Raymond M.
Chavez Trust and Rupert L. Keesler Jr.
Trust. The seller was represented by Terry Lavery, Tucson
Realty Trust, and Nancy Gansline, Oxford Realtors. The buyer
was represented by Buzz Isaacson, CBRE.
• Asarco LLC leased a 10,668-square-foot
industrial building at 3660 N. Romero Road from Orcas Triad
III LLC, represented by David Gallaher, Tucson Industrial
Realty. Ben Becker, John Ash and Adam Becker, all with CBRE,
represented the tenant.
• BBC Entertainment leased 42,688 square feet
at 4385 W. Ina Road from Bedrock Ina LLC,
represented by David Carroll, Romano Real Estate.
• Urgent Cares of America leased 4,500 square
feet at 1895 W. Valencia Road from Amanda Leigh 1988
Trust, represented by Rick Borane, Volk Company Commercial
Real Estate. The tenant was represented by Jesse Peron, CBRE.
• Dr. William P. Kuhn, doing business as Opt-E,
leased 4,404 square feet at 3450 S. Broadmont Drive from
Tin Cup Properties LLC. The landlord was
represented by Ron Zimmerman, Grubb Ellis.
• Urgent Cares of America leased 4,400 square
feet from Cortaro Continental LLC in Fry’s
Continental Ranch Plaza at the northeast corner of Cortaro and
Silverbell Roads, Marana. The landlord was represented by Craig
Finfrock, Commercial Retail Advisors. The tenant was represented by
Jesse Peron, CBRE, and Patrick Wathan, Equity Inc.
• National Mentor Healthcare LLC leased a
4,177-square-foot office building at Old Farm Executive Park, 5997
E. Grant Road, from WMS Partnership LP. The
landlord was represented by Buzz Isaacson, CBRE.
• Spa Niva LLC leased 3,953 square feet at
Paloma Village Center, 6330 N. Campbell Ave., Suite 200, from
D. Wong Associates Arizona LLC. The
transaction was handled by David Hammack and Rick Borane, Volk
Company Commercial Real Estate.
• Pima Council on Aging leased 3,308 square
feet at 1350 N. Kolb Road from Sunrise Office
Investments, represented by Tari Auletta and Jesse Blum,
Grubb Ellis. Steffan Cione, Cionne Company, represented the
tenant.
• Genesis Natural Medicine leased 3,112 square
feet at 3920 N. Campbell Ave. from T. Bryson Struse III
Trust, represented by Bruce Suppes, CBRE. Tari Auletta,
Grubb Ellis, represented the tenant.
• Dickman’s Meat Deli leased 3,000 square
feet at Tucson Marketplace, 7955 E. Broadway, from Broadpan
Properties LLC. The landlord was represented by Pete
Villaescusa, Jesse Peron and Tim Healy, CBRE. The tenant was
represented by Gary Best, Keller Williams.
• New England Life Insurance Company leased
3,000 square feet at 4713 E. Camp Lowell Drive from Siempre
Juntos LLC, represented by Richard Kleiner, Picor
Commercial Real Estate Services. The tenant was represented by
David Houge and Mike Gross, Tucson Realty Trust.
• S R Arizona Holdings LLC leased 1,280
square feet at Colonia Verde Plaza, 7245 E. Tanque Verde Road,
Suite 151, to open a Papa Murphy’s Take ‘N’ Bake Pizza. The
landlord, FPI LLC, was represented by Ken Slachta
of Romano Real Estate Corporation. The tenant was represented by
David Hammack of Volk Company Commercial Real Estate.
• Cricket Wireless leased 1,269 square feet at
Oracle-Wetmore Shopping Center, 4302 N. Oracle Road, from
Weingarten Realty, self-represented by Taylor
Vaughn. Aaron LaPrise, Harpel Company, represented the tenant.
• Wheatmark Inc. leased 1,264 square feet at
1760 E River Rd. from Cambric Corporate Center,
represented by Colleen Petit of the Colton Co. Chuck Corriere of
Keller Williams Southern Arizona represented the tenant.
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Construction appears weekly.