Inside Tucson Business 02-10-2023

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ADMINISTRATION

Steve T. Strickbine Publisher

Michael Hiatt Vice President

Claudine Sowards Accounting, claudine@tucsonlocalmedia.com

EDITORIAL

Christina Fuoco, Executive Editor, christina@tucsonlocalmedia.com

Katya Mendoza, Staff Reporter, kmendoza@tucsonlocalmedia.com

Hope Peters, Staff Reporter, kmenhpeters@tucsonlocalmedia.com

Karen Schaffner, Staff Reporter, kschaffner@tucsonlocalmedia.com

PRODUCTION

Shannon Mead Design/Production Supervisor, smead@timeslocalmedia.com

Nathalie Proulx Graphic Designer, nproulx@timeslocalmedia.com

CIRCULATION

Aaron Kolodny Circulation Director, aaron@phoenix.org

Brian Juhl Distribution Manager, brian@timeslocalmedia.com

ADVERTISING

tlmsales@tucsonlocalmedia.com

Leah Pittman Advertising Consultant, lpittman@TucsonLocalMedia.com

Kristin Chester Account Executive, kristin@tucsonlocalmedia.com

Candace Murray Account Executive, candace@tucsonlocalmedia.com

Tyler Vondrak Account Executive, tyler@tucsonlocalmedia.com

Gary Tackett Account Executive, gtackett@tucsonlocalmedia.com

NATIONAL ADVERTISING

Zac Reynolds Director of National Advertising, zac@timespublications.com

EDITORIAL & AD CONTENT

Inside Tucson Business expresses its opinion in the editorial. Opinions expressed in guest commentaries, perspectives, cartoons or letters to the editor are those of the author. The content and claims of any advertisement are the sole responsibility of the advertiser. Tucson Local Media assumes no responsibility for the claims or content of any advertisement. Publisher has the right to edit for size or refuse any advertisement at his or her discretion.

Chasse Building Team continues expansion across Tucson

By Christina Fuoco-Karasinski Tucson

Staff

In 2007 — just months before the Great Recession gripped the nation and especially the building industry — Barry Chasse took a big chance on himself, trusted partners, and the relationships they had developed during their two decades in the construction industry to date.

“We started Chasse Building Team with an eye to be a 100% local general contractor focused on building to make a difference for our teammates, our clients’ building experience, and within the local communities we serve,” Chasse said.

He earned projects across Maricopa County that kept the business going despite the real estate crash.

Taking on Tucson

By 2014, the team hit its stride and started earning projects in Pima County. It was so successful that, in 2016, Chasse and his team invested in a regional headquarters in the area.

“Pima County, and especially Tucson, has seen a whirlwind of strategic growth, and we are proud to have been a part of it for nearly 10 years now,” said Leigh-Anne Harrison, Chasse Tucson executive

director. “We’ve grown right along with it, being honored with the Copper Cactus for Business Growth in 2018 and as Business of the Year in 2019.”

In addition to the honors, in late 2018, CHASSE expanded to a 3,800-square-foot Southern Arizona regional headquarter office, located at 5115 N. Oracle Road in Tucson, while working on such projects as the Tucson Premium Outlets, Gladden Farms Elementary School, and Mountain View High School College Career & Life Skills Center.

COVID-19 response

“We were growing by leaps and bounds, and then COVID-19 came along, changing the way we did everything from simple meetings to large-scale builds, not to mention the emotional toll on everyone,” Harrison said.

Resolute to help Southern Arizona cope with the pandemic while still getting critical work completed, Chasse sprang into action in several ways.

“As an essential business, we never shut down, so we had to be ultra-focused on creating systems to keep our team members, clients and their families safe first and foremost,” Harrison said. “From extra hand-wash-

10 ways to incorporate wellness into the workplace

Workplace wellness is a hot topic — and for good reason. A healthy and happy workforce is a productive workforce, and there are many ways in which employers can promote wellness in the office. From encouraging regular breaks to promoting healthy eating, there are a variety of strategies that can be implemented to make the workplace a healthier and more positive environment.

Year over year, our employees have rated health care and wellness programs as top reasons why they like working at Cox, so we know firsthand how beneficial it is. Consider these tips to add wellness to your business culture.

1. Encourage regular breaks. Exercise is known to boost productivity. Encourage employees to get moving during break periods. Employees can connect to nearby Cox Wi-Fi hot spots to listen to music during their walks without using up data.

free educational sessions that you may look into.

6. Be a leader. Do your part by participating in your team’s wellness activities. Cox’s leadership actively participates alongside its team at company-sponsored nonprofit walk events.

7. Make it social. Wellness is about having fun. Engage employees and encourage conversation about wellness goals. Consider hosting a challenge to boost interaction around your new wellness program.

8. Set goals as a team. When everyone is working toward a common goal, it fosters interaction and teamwork in the workplace. Create a goals chart to hang up in the office and have employees contribute to completing it. During the work remote period, we hosted virtual 5K walk/runs, where our employees could log their miles and win prizes.

ing stations to adjusting subcontractor schedules to displaying new COVID signage and coordinating deliveries to align with as little construction traffic as possible, you name it, and we did it,” Harrison said.

The Tucson team stayed in line with the new OSHA guidelines and managed to not lose a workday.

Chasse thought outside of the box to keep the lines of communication open among clients amid the pandemic and got to work on ways in which they could use their skills to help the community.

2. Promote healthy eating. Provide a variety of food options like fruit and healthy snacks in the office, or consider offering a subsidy for employees who bring their own healthy meals.

3. Support mental health. Offer access to confidential counseling services or promote mental health resources such as a meditation or yoga class.

4. Encourage exercise. Give your employees a space to de-stress by turning an empty office into an exercise room. At Cox, we offer employees a trail around our main office with mileage markers. This trail encourages employees to take a walk during their breaks, helping them to clear their mind and relieve stress.

5. Offer education. Wellness education is important for promoting a healthy lifestyle. Consider offering online classes on topics like nutrition and disease prevention. Many health insurance providers offer

9. Know your numbers. This is not just a statement; it’s actually an annual program that Cox offers its employees. We bring in medical staff to conduct free biometric screening tests that measure glucose, triglycerides, cholesterol, blood pressure and waist circumference, to name a few. During the event, we stock employee break rooms with fruit, energy drinks and healthy snacks.

10. Use technology to reach fitness goals. Encourage employees to use mobile apps to monitor and track fitness goals. This allows them to access popular workout tutorials on the go. From time to time, we offer Fitbits as prize incentives when employees log their walking progress.

Lisa Lovallo is the Southern Arizona market vice president for Cox Communications, leading a team of 260-plus Southern Arizona Cox employees. Prior to joining the Cox Southern Arizona team, Lovallo ran a family business based in Tucson and is a graduate of the University of Arizona. Reach her at lisa. lovallo@cox.com.

Local Media

Sundt Construction promotes 2 in Tucson

Sundt Construction’s Building Group recently promoted Courtney Hoyt and Mike Hill in the Building Group’s Southwest District, Tucson region.

“Both Courtney and Mike are very deserving of their new roles,” said Ian McDowell, Sundt vice president and regional director.

“Their dedication to Sundt and the passion for their work makes them a natural fit for these larger positions.”

Hoyt has been promoted to assistant project manager. She has served in the construction industry since her first internship in 2013 and has been with Sundt for four years as a project engineer and field superintendent. She has worked on multiple UA projects such as the Student Success District and the Chemistry Building renovations and additions. Hill has been with Sundt for 20 years and has been promoted to project director. He will be focused on aviation projects in the West and Southwest. Hill is a recognized industry veteran with over 44 years of industry experience, much of which has been spent managing large, complex projects. His expertise includes airport terminals, mission critical operations, hospitals, community facilities and corporate office buildings.

HIRING

Medicare rates us a Top Home Health Agency in Arizona

Our nurses are happy

Courtney Hoyt

Mike Hill

“We worked to help schools gain access to technology to allow for virtual learning as well as visited campuses to see how we could help,” Harrison said.

“We also built and installed custom hand-washing stations at 13 elementary schools across Pima County, including Butterfield, Coyote Trail, Degrazia, Dove Mountain CSTEM K-8, Estes, Gladden Farms, Ironwood, Picture Rocks, Quail Run, Rattle Snake, Roadrunner, Tanque Verde and Twin Peaks.”

Each station allowed for students to wash while safely separated and has a hose hookup so it can be moved virtually anywhere

on campus.

During the height of the pandemic, Chasse completed one of its highest-profile Tucson projects, the Jan. 8 Memorial located in El Presidio Park adjacent to the Historic Pima County Courthouse. It honors the

victims and survivors of the Jan. 8 when then-Rep. Gabby Giffords and 18 others were shot during a constituent meeting held in a supermarket parking lot in Casas Adobes.

“The memorial and its surrounding gardens

represent a community embrace. In a single gesture, its landforms become healing arms protecting the inner memorial, where the story of Jan. 8 is told,” Harrison said.

“Carved into the landscape of El Presidio Park, the memorial is a place of contemplation and reflection where visitors can honor the victims and survivors of this tragic event, who were there to engage in democracy, and the first responders who stopped the

violence and saved lives.”

Bouncing back big

Now with the pandemic easing, the Tucson team is experiencing its biggest growth.

“Today, we are 30 employees strong across Southern Arizona and counting,” Harrison said.

“We are also now owners of the business.”

In late 2021, Chasse and fellow leadership surprised the entire firm by announcing it had become a 100% employee-owned

firm by launching an Employee Stock Ownership Plan (ESOP), which Chasse nicknamed a Team Stock Ownership Plan, or TSOP for short.

“We want our employees to act and think like owners, and directly benefit from Chasse’s continued success as participants in the TSOP,” Chasse said.

“The plan, which allows employees to earn stock

(Chasse Building Team/Submitted) Chasse Tucson was proud to work on the Jan. 8 Memorial located in El Presidio Park adjacent to the Historic Pima County Courthouse.

(Chasse Building Team/Submitted)

Chasse celebrates its Southern Arizona Regional headquarters opening in Tucson.

(Chasse Building Team/Submitted)

A look inside of the Pima Community College Automotive Technology and Innovation Center, for which Chasse Tucson served as the general contractor.

REAL ESTATE & CONSTRUCTION

Real estate transactions

Share information with Inside Tucson Business’ land transactions column. Send items to christina@tucsonlocalmedia.com.

By Christina Fuoco-Karasinski Tucson Local

SALES

Longitude Holdings

LLC has purchased 19,268 square feet at 1302 E. Prince Road, from Casa de los Niños Inc. Joey Castillo of Volk Company represented the buyer and Cameron Casey and Lori Casey of Oxford Realty Advisors represented the seller in this transaction.

LEASES

And Go Concepts LLC, dba Salad N Go, has leased the pad at 7980 E. Speedway at the Speedway Pantano Square retail center at the southeast corner of Speedway and Pantano. The pad is located along Speedway north of the Firestone. Isaac Figueroa with Larsen Baker represented the landlord, and Dave Hammack with Cushman & Wakefield Picor represented the tenant.

Management

Lash Effects LLC has leased 837 square feet in suite 304 at Craycroft Plaza, 1011 N. Craycroft Road. The fully leased medical plaza is listed for sale by the Larsen Baker sales team.

Elaina Elliott and Isaac Figueroa with Larsen Baker represented the landlord and handled this transaction.

Strongbuilt Plumbing & Air has leased 15,450

square feet at 4775 S. Butterfield Drive. The project known as Butterfield Technology Center had the last remaining vacancy at the 100,000-squarefoot office/flex park. Isaac Figueroa, CCIM, with Larsen Baker represented the landlord in this transaction.

Larsen Baker recently acquired the former Circle K at 401 S. Alvernon, located between Broadway

and 22nd across from the Randolph Municipal Golf Course and adjacent to the Double Tree Hotel.

Larsen Baker plans to redevelop the site for either drive-thru or traditional restaurant use. Alvernon Pad Buyers LLC, an affiliate of Larsen Baker, purchased the property for $342,875. Isaac Figueroa,

CCIM represented the buyer and handled the transaction.

At Oracle and Fort Lowell Center, The Carpet Store was assigned to a new owner and renewed its 2,146 square feet. This was the last remaining vacancy at the center. Elaina Elliott and Isaac Figueroa handled

the lease on behalf of the landlord.

Class Pays Inc. leased an approximate 29,417 of warehouse/office building at 4101 E. Colombia Street from Pima Land & Cattle LLC. Gary Emerson of GRE Partners LLC handled the transaction for the landlord. ITB

Media Staff

(Larsen Baker/Submitted)

Larsen Baker recently acquired the former Circle K at 401 S. Alvernon, located between Broadway and 22nd across from the Randolph Municipal Golf Course and adjacent to the Double Tree Hotel. Larsen Baker plans to redevelop the site for either drive-thru or traditional restaurant use.

(Larsen Baker/Submitted)

Strongbuilt Plumbing & Air has leased 15,450 square feet at 4775 S. Butterfield Drive. The project known as Butterfield Technology Center had the last remaining vacancy at the 100,0000-square-foot office/flex park.

Commercial real estate trends in 2023

By Barbi Reuter Tucson Local Media Contributor

Three years.

That is how long it has been since the onset of the COVID-19 pandemic and the seismic effect it had on all elements of life, including the commercial real estate market.

As the economy continues to rehabilitate, here is a look at today’s economy, the activity of each commercial real estate division, and where 2023 may be headed.

Economy

During the fourth quarter, employment in Tucson increased to 393,000 jobs,

up 2.2% over the same time in 2021. At 3.8%, the local unemployment rate remained flat compared to one year ago and is forecasted to increase in the year ahead.

Household formation grew 1.9% year over year (YOY) with median household income increasing 5.8% YOY from $60,100 to $63,600.

Nationally, consumer spending grew at a healthy 8.5% rate and retail sales were similarly up 8.4% YOY. Inflation persisted over 7%, high relative to recent years, while consumer and corporate balance sheets remain cash strong.

Office

Throughout 2022, the Tucson office market was challenged by post-pandemic disruption to work patterns and reconsideration of layout and use of space. The office vacancy rate rose slightly to 10.4% on the total available inventory of 28,887,249 square feet. (See related story.) While the Refinery at the Tech Park was completed, adding 120,000 square feet to the market, health care and ancillary medical practices continue to be the largest driver of new activity. With employers working through hybrid models for their workforces, many businesses are

considering smaller spaces upon lease renewal, a trend we expect to continue in 2023.

Work from home has also particularly challenged call center/telemarketing users and is only worsening as leases come up for renewal with a reduced in-person workforce.

Available large blocks of space suitable for office, back office and call center uses equal about 2 million square feet and will likely increase. Given the higher interest rate environment, seller financing is growing in popularity, and some owners are willing to carryback financing to get deals done.

Certainly, the busy Foothills submarket has been able to drive rates up, but otherwise rental prices in Tucson remained stable. Many owners have also been creative in utilizing incentives to move transactions forward, another trend that will continue and perhaps grow as well.

Rick Kleiner, principal, MBA, one of Cushman & Wakefield/PICOR’s office specialists, said, “COVID’s impact upon the professional office market was severe. Current data indicates that the typical office employee census is onehalf to three-fourths of pre-COVID-19 numbers. Larger offices comprised of dense cubicle floor plans remain vacant. Over the near term a continuing return-to-office momentum will eventually bring about decreased office vacancies and increased rents.”

Industrial

The Tucson industrial market remained stable at year-end, with marketwide vacancy approaching a historic low of 2.5%. Net absorption in the fourth quarter was estimated at 590,980 square feet, about half in newly constructed projects.

Demand will continue to be driven primarily by logistics, distribution, manufacturing and the cannabis industry in 2023. Despite the low vacancy rate, only two new developments broke ground: Southern Arizona Logistics Center at Tangerine and I-10, with a proposed total of 1.7 million square feet, and Tucson Commerce Center at Valencia and Alvernon, with a proposed total of 780,000 square feet.

Land sales remained slow due to lack of inventory, rising construction and financing costs. Several notable investment

sales transactions closed last quarter, and on deck for 2023, Sion Battery, TuSimple and American Battery Factory (ABF) have announced expansions and new projects in greater Tucson.

Sion will add 111,000 square feet to its existing plant, creating 150 new jobs by 2026. TuSimple is adding 35,000 square feet to its facility. ABF has selected Tucson as the site of its first giga factory in the United States with 2 million square feet under roof and an investment of $1.2 billion. Finally, Rainbird is also under construction with a 100,000-squarefoot expansion to its Tucson facilities.

“The industrial market is experiencing historic high occupancies with a vacancy rate currently at 2.5%. New construction is scheduled to be delivered

(Submitted)

Barbi Reuter

CHASSE

CONTINUED FROM PAGE 4

in the firm, is designed as a long-term retirement benefit for all employees as owners.”

Under the plan, all eligible employees will earn a yearly allocation of stock and their value will increase as the value of the firm increases along with all other benefits already in place.

“The move made us feel like we like we were building our own futures right along with building up Southern Arizona,” Harrison said. “And if our current slate of projects is any indication, the future looks very bright for one and all.”

According to Harrison, just some of Chasse’s recent work includes:

• Pima Community College Center of Excellence for

Advanced Manufacturing, a 95,000-square-foot project recently completed with curriculum pathways of welding, machine tools, mechatronics, CAD design, a workforce development incubator, flexible industry training lab, and administrative offices. It also features a three-story gantry crane with 30,000-square-feet of outdoor learning space that enables the movement of materials throughout the facility for unified connection between multiple pathways.

• Mountain Vista School in the Oracle Unified School District, which received a new classroom building, which includes 10 stateof-the-art classrooms for students in fifth through eighth grades.

• Pima Community College Automotive Technology

and Innovation Center, a 45,000-square-foot space that houses programs in automotive technology, diesel technology and

electronic vehicle technology to meet the growing demand of dealerships and other employers for students certified in today’s

technology.

Chasse also recently completed the 100,000-squarefoot Tucson Airport Distribution Center as well as the

Sprouts at the Landing, and they will soon wrap up the new Springhill Suites at The Bridges.

Info: chasse.us

(Chasse Building Team/Submitted)

Chasse Tucson worked to install distanced hand-washing stations at schools across the county during the height of COVID-19.

Pandemic changed the way commercial real estate works

By Laura Latzko Inside Tucson Business Contributor

Pandemic-dictated workat-home schedules have led companies in Tucson — and worldwide — to search for smaller spaces. Meanwhile, entrepreneurs are interested in collaborative workspaces and call center buildings are converted back into the industrial buildings.

Mark Irvin of Mark Irvin Commercial Real Estate said while some have returned, it has not been in droves.

Irvin specializes in office and medical properties and recently stepped down as the longest-tenured board member for the Rio Nuevo District.

Irvin said many companies are having a difficult time getting employees to return to the office. Technologies such as Zoom and Microsoft Teams have helped people to transition to working from home.

“There is no question that the pandemic pushed people to work from home,” Irvin said.

“In the process of learning to work from home, they got quite comfortable being at home.”

At year end, Irvin takes stock of what space is available in Tucson in big blocks.

Irvin said prior to the pandemic, there would be about 10

to 12 options available in the 10,000- to 12,000-square-foot range.

This year, Irvin found there were 35 to 38 available options when looking for one of his returning clients.

“That’s a pretty good indication of what’s going on in the market,” Irvin said.

“During that time, nothing has been built. That’s just buildings that used to be occupied that are no longer occupied. That’s just in the traditional office market.”

Irvin described the current climate as “a tenant’s market,” which is impacting different areas in Tucson.

Many of Irvin’s clients are looking to “right-size” to smaller office spaces that fit their needs. Some companies are uncertain on how to proceed.

“If the lease is up for renewal, they aren’t sure what’s going to happen with their employment base,” Irvin said.

“They do a short-term renewal where they are until they figure things out, or they need to find a way to give back half of the space. I think a lot of people are afraid to give it up because they aren’t sure if things will come back.”

Irvin said there are benefits for employers to having a smaller space or operating solely remote.

“I think employers are sitting here trying to find out the best thing to do. I think they understand employees’ perspective, but they have a business to run. If they can find a way to do that with people working remotely, that’s great and obviously saves them some money. … They aren’t renting space. They’re not using air conditioning. They aren’t providing utilities,” Irvin said.

During the pandemic, many office spaces were only occupied by a few people, or even just the owners or executives. Irvin said this has been the case for smaller and larger businesses.

“It’s impacted everybody. There’re a lot of owners who are sitting in their office while all of their employees are working from home. There’re a lot of skeleton crews at the office, and a greater majority of people are working out of the house,” Irvin said.

Irvin said that having vacant spaces can result in greater numbers of break-ins and thefts. These buildings also attract transient and homeless individuals.

Irvin has also found that many owners are having a difficult time getting insurance on empty office buildings.

Emerging trend

An emerging trend has been

that entrepreneurs are renting out hybrid-style offices that offer more collaborative environments, such as the L Offices on Congress Street and at River Road and Campbell Avenue and the Post Workspaces on Oracle Road.

“I think people are still needing the ability to touch and connect. A lot of the smaller entrepreneurial folks are really chasing those types of offices, or they just like that connectivity. If they want to lock themselves in their office, they can. If they want to buy a seat and sit at a big table with four to five other people, they can,” Irvin said.

Irvin said that these types of offices offer options for various uses.

“I think what people like about it is if they want to be around a lot of other people, they can. If they need to work in a private conference room, they can. Most of the people go Downtown there and rent an office that might be 4-by-4, just a small, little office. The rest of them are sitting out in a collaborative space,” Irvin said.

Irvin said these types of office spaces are being occupied at high capacities, while other buildings are at half-capacity or empty.

“A lot of these offices are full or are getting close to full, while the rest of the market isn’t faring well,” Irvin said.

Irvin said that some industries, such as title companies and medical offices, have not been impacted because employees cannot work from home.

Irvin has found that certain areas, such as the Foothills and Campbell Avenue Corridor, are seeing fewer vacancies than others. He said the university, the hospital and the cancer center in this area help to bring people in for work.

Employees working from

home has affected other industries as well.

Irvin has especially noticed this impact on Downtown restaurants. Three popular Downtown restaurants that closed during the pandemic include Elvira’s, Café Poca Cosa and Janos.

“I do think it has had a detrimental impact on local businesses that rely on that business. Probably the retail and restaurant trade are the other hardest hit by virtue of no employees going out to lunch. Now, are they returning? Yeah, we are starting to see a trickle back, but not in any great waves,” Irvin said.

Automated systems along with work-from-home trends have had an impact on call centers.

Many of the spaces that were originally industrial are being converted back into warehouses. This only affects buildings that were originally industrial, as there are also call centers that were originally office or retail spaces.

Steve Cohen of Cushman & Wakefield/PICOR, who specializes in industrial real estate, is working with clients who are converting call centers back to warehouses.

This includes a client in the North Tucson Business Center at the I-10 and Prince Road.

He said this process can be costly but not as much as it was to change the spaces over to call centers.

Converting these buildings back to industrial means putting in roll-up doors and loading docks and removing furniture, dropped ceilings and office flooring.

Call centers rent at a higher rate than industrial space. Still, owners are choosing to convert them.

“It’s either that or let it sit for years vacant,” Cohen said.

Cohen said in the fall 2019, there was no available existing “plug-and-play” call center space available.

He said today, there is around 1.2 million square feet of this type of space on the market.

“That’s what property owners call the space. It’s available to move into. It’s got telephone and computer connections and furniture. It’s ready for someone to move in,” Cohen said.

Cohen said many of his clients have this type of call-center space that they need to sell or adapt.

“We have several of those buildings listed. They were originally warehouse spaces that a tenant came along and asked the landlord to drop the ceiling and take out the loading docks, add parking and convert it to callcenter space,” Cohen said.

“We recommended to many of our owners that they convert it back to warehouse space, and people are actually considering it. Several of them are in the process of selling the buildings so that the buyer can convert the building back to a manufacturing or warehouse space or doing it themselves.”

Cohen said the vacancy rate for industrial space is around 2.5%, compared to more than 10% for office space. So, there is greater need for industrial/warehouse space in Tucson.

Cohen said that many call centers aren’t using spaces fully or at all.

“We don’t see the need for call center space coming back to the level that it was. There are call centers that are under-leased, that aren’t full. Some aren’t even being used, where the tenant is still paying the rent. Over the next several years, as those leases expire, it will be interesting to see exactly what happens,” Cohen said. ITB

by the end of this year, but in the meantime, there is considerable pressure on increasing lease rates,” said Rob Glaser, CCIM, SIOR, office specialist at Cushman & Wakefield/PICOR.

Retail

Tucson retail vacancy rates held steady at 6.2% at year-end, while absorption rates are below normal. Most of the fourth quarter absorption resulted from properties built to suit. One big beacon that will likely continue: Significant restaurant activity continued across the spectrum, including dessert concepts, health foods and other new entries to the Tucson food scene. “Med-tail” is also very actively going into spaces that were tradition-

ally more retail oriented with concepts like injectables and medispas. Larger medtail companies like Action Behavioral, Archwell and Oak Street looked for spaces of 6,000 to 10,000 square feet. Quite a few new cannabis dispensary licenses have been issued in Tucson, and this may continue.

Other categories with activity of note that may continue include car wash, auto parts and grocery. Of note, Sprouts opened a new location in The Landing at Irvington and I-19. Fry’s Marketplace shopping center at Gladden Farms is moving forward after 15 years on pause.

Hot submarkets with strong activity include southeastern Tucson in the Houghton area, the I-19 corridor from the I-10 junction south to Sahuari-

ta, The Bridges near I-10 in south central Tucson, and Oro Valley.

With build-to-suit activity dominating construction, investment speculators and cash buyers have been sidelined by the uncertain interest rate environment. While there is over 205,000 square feet under construction, 97% of it is pre-leased.

“Tucson’s leasing activity for restaurants remain active and strong. Valuation of retail properties for purchase are up modestly from last year,” said Andy Seleznov, CCIM, retail specialist with Cushman & Wakefield/PICOR.

Multi-family

The end of 2022 saw a decline and slowdown in the rental market. Units being marketed at pre-ad-

justment rental numbers are slow to lease. This softening in rents results from the market changes and renters exercising caution financially to not stretch outside of their means. In surveying local managers, many cite the fourth quarter as the slowest leasing quarter in Tucson since 2019.

Units that would previously have leased within days are now taking weeks or months to lease. The city of Tucson is still working to fill the need to place affordable housing tenants. Subsidized rents are only slightly below market rents with the goal of enticing owners and managers to fill vacancies with lower-income tenants. Going forward in 2023 and beyond, Tucson will likely experience softer

YOY rent increases than in recent years.

Supply and demand in the Tucson MSA have completely flipped from the beginning of 2022. Owners who had pricing expectations based on property values in the first half of the year have had to adjust to the new reality if they wish to move their product in this market.

The softening in the rental market has caused more cautious underwriting and projections by buyers when evaluating deals. Finally, each year, regardless of the market’s strength, a seasonal slowdown is experienced during the holidays. In 2023, the market will likely cool and require closing the gap between seller’s expectations and purchasers’ willingness to pay.

“In 2023, we expect the apartment market to see a slight softening in pricing and rise in cap rates as interest rates remain unsteady. We are optimistic that investors still have demand for multi-family in Tucson, due to its relative affordability compared to the larger Southwest MSAs,” said Joey Martinez, principal, multi-family specialist at Cushman & Wakefield /PICOR.

Barbi Reuter is chief executive officer at Cushman & Wakefield/ PICOR Commercial Real Estate Services, a Tucson-owned full-service commercial real estate company. Kate Zimmerman, social media and graphic designer coordinator at Cushman & Wakefield/PICOR, and Alison Bailin Batz, a local freelance writer, also contributed to this piece. Learn more at picor.com.

MIGUEL ANGEL JIMENEZ 2022 COLOGUARD CLASSIC CHAMPION

Government is trying to make tax season harder

By Hubert Johnson Guardian Tax Law Owner

We all know what it’s like to toss and turn in the middle of the night, thinking about an issue that won’t go away. Most often, the issues keeping people up at night are money related. In fact, a new study found that financial worries cause 87% of Americans to lose sleep.

I see this all the time with our clients — individuals, parents and small-business owners who have persistent tax issues. Not only is their hard-earned money on the line, but they are having to go up against massive agencies like the IRS to resolve any taxes owed. My job is to make sure they don’t have

to go it alone and give them much-needed expertise under stressful circumstances.

Unfortunately, some politicians in Washington are pushing a proposal that could leave millions of American taxpayers to deal with the IRS on their own. Last year, Congress passed a bill requiring the IRS to study the feasibility of a government-run tax preparation system. That may sound innocuous enough; it may even sound like a good idea to some. In reality, however, it would mean that Americans — including busy parents, overworked small-business owners and low-income families — would be responsible for holding the IRS accounta-

ble to get the refunds they deserve. We already see plenty of clients deal with plenty of issues, from getting bad tax advice or incorrectly prepared returns. Many have used “cheaper” tax services that have caused thousands of dollars in damages.

Relying on the IRS to give you good tax advice is like relying on a prosecutor to give a defendant good advice. The IRS’ whole job is to collect as much tax revenue as possible. They are not there to defend your rights or help with tax-saving tactics.

Dealing with the IRS can be incredibly time consuming. During recent tax seasons, a taxpayer seeking IRS assistance had a 1-in-50

chance that the agency would answer the call. Since COVID-19, most taxpayers have had to wait up to two hours to have their call answered. Adding insult to injury, it’s very common for taxpayers to wait only for the call to drop. It’s understandable why so many Americans turn to trusted professionals or online tax preparation resources when the IRS is clearly overwhelmed.

Just last year, a truck driver named Donald Krimpler took a day off of work to deal with the IRS. It turned out that the mistake was the IRS’ fault. Most taxpayers find that they cannot even communicate with the IRS departments handling their cases and spend hours, days

or months to get a response from the IRS. Arizonans work too hard to use their time fixing the government’s mistakes.

Taxpayers also work too hard to miss out on deductions. Recently, a report from the National Bureau of Economic Research found that less than half of government pre-populated returns would be accurate. If the government simply auto-fills your return, it’s likely that they will leave out important information that occurred over the last year for tax credit purposes. An inaccurate return could mean missing out on a deduction that would put money back in your pocket or having to contact the IRS to correct

the mistake. Either way, it’s an unnecessary headache. For 15 years, dealing with the IRS and state tax agencies has been my full-time job, but it shouldn’t have to be yours. As a tax attorney, I help solve tax problems, and this latest proposal to move toward a government-run tax preparation system only creates more problems for taxpayers. In Arizona, we pride ourselves on independent thinking that solves real problems for real people. I would urge Sens. Sinema and Kelly to put a stop to this misguided proposal on behalf of Arizona taxpayers.

Hubert Johnson is a tax attorney and the owner of Guardian Tax Law based in Tucson. ITB

Omni Tucson reveals multimillion-dollar transformation

By Summer Aguirre Tucson Local Media Staff

Tucson residents and visitors can now enjoy a Southwestern haven at the Omni Tucson National Resort, as the destination has revealed its multimillion-dollar renovations.

After approximately nine months of construction, the resort began the new year by unveiling an array of remodeled amenities. From luxury guest rooms and suites to new dining and wellness experiences, guests are bound for a memorable stay under the bright Southern Arizona skies.

“It’s an exciting time,” general manager Michael Maruca said. “We’re known as being a prime golf destination, and with the reimagination and being able to introduce ourselves back to the community, it’s a great time — we’re giving tours and showing people what we have to offer.”

Omni Tucson National Resort, located at 2727 W. Club Drive, is nestled in the scenic foothills of the Santa Catalina Mountains. Across 600 acres, it features 130 guest suites, including 79 main building options and 51 casitas and haciendas suites with private patios.

The resort also showcases three tennis courts, one pickleball court and two championship golf courses that have hosted over 30 PGA Tour events, making for an ultimate golf-lover’s paradise.

Its picturesque natural surroundings were a

significant inspiration for the Southwestern design of the overall project. When guests arrive at the resort, they are welcomed by the color palette of the desert landscape and a relaxed ambiance.

The resort’s refreshed accommodations include the remodeling of the deluxe and premier guest rooms, which have a bright, modern residential atmosphere. All casitas and hacienda suites lining the greens were redesigned, with their secluded patios overlooking the lush courses and landscape.

“I think the designers were able to really pay homage to Tucson and the Southwest with hints of Southwestern designs without being overbearing,” Maruca said.

Beyond Omni Tucson’s Southwestern design transformation, Maruca noted the lobby as one of the most significant renovations of the resort. He describes it as a “treasure hunt” when one first arrives, with views of many of their amenities.

“When you check in on

the weekends and we’re doing a champagne check-in, you hear the live acoustic guitar — it’s just a very open setting,” he said. “You can see straight through to the Catalinas from check-in. I think that’s probably one of the things that people will find most surprising.”

Another highlight is the renovation of the Mokara Spa, where guests can escape for a relaxing retreat. Designed with organic and earthy touches, the 9,000-square-foot facility features 12 treatment rooms and an array of services for individuals, couples and groups, which includes a sauna and Vichy shower room. A second pool with private cabanas was added as well.

To complete the spa and wellness experience, there is a full menu of salon services, expanded manicure and pedicure stations, and relaxation areas.

“We also just opened up a brand-new, state-of-theart fitness center with allnew equipment,” Maruca said. “Brand-new Pelotons, treadmills, stair climbers,

weights, you name it. That area is also a significant upgrade.”

Omni Tucson’s reimagination also includes the remodeling of over 25,000 square feet of indoor and outdoor meeting space. The resort has 13 meeting areas, which includes the Papago Ballroom and the Norville Lawn, the resort’s largest outdoor expanse.

Bright with natural light and banquet space with meeting tables, there are customizable options for large or small events.

For dining, the resort revealed new restaurants, lounge concepts and several refreshed spaces to accompany local favorites, such as the Texas staple Bob’s Steak & Chop House.

One of Omni Tucson’s new venues includes The Peak, a lounge with a racetrack-style bar offering craft cocktails. With indoor and outdoor seating overlooking the pool and mountain range, it is a great spot to end a day of meetings, golf, sightseeing or relaxation.

Additionally, renovations were completed to Legends

Bar & Grill, the 19th-hole experience featuring art and memorabilia recognizing the golf course design with mementos from the past.

“The Terra Cotta Café is our answer to an elevated coffee shop. … We have coffee, pastries and tea. You can have indoor dining, or you can dine out on our terrace,” Maruca said.

“It is one of the nicest coffee shops I’ve ever seen in my life,” he added. “Our retail is second to none there. We have to be one of the only coffee shops in the country that sells Louis Vuitton bags. That’s kind of a cool concept.”

Not yet open is the modern Southwestern restaurant Desert Farmer, which will serve breakfasts ranging from smothered waffles with jalapeño and cumin bacon to deep-dish quiche with turkey chorizo.

“The reimagination of Omni Tucson National Resort has put food at the forefront so that more memories around the table will be made,” executive chef Jonathan

Stutzman said in a statement. “The additions of Desert Farmer, The Peak and Terra Cotta Café to our existing Bob’s Steak & Chop House, Legends and Sweet Water Terrace give us the opportunity to offer a quintessential experience of the Sonoran Southwest from a true culinary perspective all over the property.”

Maruca calls the Omni Tucson “small but mighty” due to its more compact site and wide offerings, which he believes differentiates it from other resorts.

“It’s an exciting time for Arizona as a whole,” Maruca said.

“Omni is getting ready to open up in Tempe and we have our Scottsdale Hotel, so Arizona is a very exciting place for Omni to be part of at this time.” ITB

(Omni Tucson National Resort/Submitted)

The resort, located at 2727 W. Club Drive, is nestled in the scenic foothills of the Santa Catalina Mountains. Its picturesque natural surroundings were a significant inspiration for the southwestern design of the overall project.

(Omni Tucson National Resort/Submitted)

Omni Tucson’s upgrades include luxury guest rooms, new dining opportunities, expanded wellness experiences and modernized meeting spaces. Guests are bound for a memorable stay under the bright Southern Arizona skies.

Build More Innovative Health Benefit Packages

By Heather Kane, CEO, UnitedHealthcare of Arizona

While encouraging a healthier workforce has long been a priority for many employers, several recent trends have sparked a renewed emphasis for some organizations. A competitive labor market, high inflation, and the lingering effects of the COVID-19 pandemic have many employers focusing on offering more innovative benefit packages. The goal is to help attract and retain team members, spur productivity, and reduce the incidence of preventable medical events and costly chronic conditions.

It’s time well spent, according to studies that show a healthier workforce may help improve productivity and bolster a company’s bottom line.

To help employers in Arizona make better health benefit decisions, here are five emerging strategies to consider:

• Reward Employees for Wellness Activities. Most U.S. employers offer well-being programs, and some include financial incentives for meeting certain health targets, such as reaching a daily steps goal or maintaining a healthy body mass index. To make these initiatives more appealing and engaging, some employers are incentivizing a growing number of healthy activities, including filling out a health survey, selecting a primary care physician, getting a biometric screening, meeting certain movement goals, or tracking sleeping. Plus, instead of virtual coins or rewards that can only be used to help pay for medical care, some programs are starting to enable enrollees to annually earn gift cards worth hundreds of dollars annually — and spend them in any way.

• Expand Access to New Types of Virtual Care. Nearly 90% of Americans surveyed said they want to continue using virtual care for non-urgent health needs, while 76% of employers grew their virtual care offerings in response to the pandemic. Virtual care, also called telehealth, has expanded from treating urgent care issues, such as allergies, rashes, or seasonal flu, to now providing access to other types of care, including primary, specialty and behavioral. Company and human resources leaders should continue to assess and refine virtual care options currently available to employees through their health plan, local care providers, or other virtual service providers. Leaders can also look to add emerging virtual care resources such as those for physical therapy, dermatology, and women’s health.

• Help Address Social Determinants. A recent survey of large employers found nearly 80% already have or plan to take steps to

help address social determinants of health, such as access to affordable housing, nutritious food, and reliable transportation. Research shows that social determinants of health – more so than what happens in the doctor’s office – may influence up to 80% of a person’s health. That’s why some employers are using predictive analytics to proactively identify employees who may be dealing with social issues, and then connect them with low- or no-cost community resources, which may help them save on utility and internet bills, childcare costs, and even home repairs.

• Add a Plan with Upfront Pricing. Some health plans are doing away with deductibles and instead giving employees first-dollar coverage, coupled with access to upfront pricing information before they schedule medical appointments. In doing so, these plans may help remove financial barriers to care and encourage people to select quality, cost-efficient health care providers and facilities. In many instances, employers are offering a traditional health plan alongside one of these newer options, which may help reduce the total cost of care for employers and lower out-of-pocket costs for employees.

• Evaluate Coverage Options for Intermittent Workers. More than 59 million Americans are part of the “intermittent workforce,” meaning they are not employed in traditional full-time roles. The intermittent workforce includes parttime and seasonal hourly W-2 employees and full- and part-time W-2-contingent contractors employed by staffing firms. To help recruit and retain these workers in a competitive job market, employers can now provide access to health benefit options by adding limited medical plans. When compared to traditional medical benefits, these plans can offer lower monthly premiums and the elimination of deductibles and copayments for virtual visits. It’s worth noting, while these plans are designed to help provide important access to medical care at more affordable prices, coverage restrictions will apply to some medical services.

Employers are in a unique position to help improve the health and of employees. By considering these emerging health benefit trends, employers may help support the well-being of employees now and in the future.

Dr. Kelly’s Surgical Unit expands to meet need for pet care

By Summer Aguirre Tucson Local Media Writer

Pet owners in Tucson will soon have a reliable, affordable pet vet in their backyard with Dr. Kelly’s Surgical Unit’s new brick-and-mortar clinic.

The specialized veterinary practice recently purchased the former Camino Seco Pet Clinic at 8860 E. Broadway Boulevard, which will be its first Tucson brick-and-mortar. It’s the third overall location, with the other facilities being mobile.

It’s expanding due to demand and its success operating primarily from mobile units, through which it pursues its mission to provide convenient, low-cost surgical and dental care for dogs and cats

directly in their neighborhoods.

“This (expansion) means that we’re doing the right thing. It means we are finding people and pet owners who are in desperate need of care at a cost model that makes sense for them,” said Douglas Patriquin, co-owner and CEO of Dr. Kelly’s Surgical Unit. “It means a lot for us to touch that market, to help those people, to get those calls that say, ‘Thank goodness we found you. We really appreciate what you do.’”

Patriquin owns Dr. Kelly’s Surgical Unit with his wife, Dr. Kelly Patriquin, DVM. The prices range from eCollars at $15 to leg amputation starting at $550.

The team is remodeling

its new clinic with plans to complete it over the summer. While the new location is under construction, a fully operational mobile unit will be parked on the lot.

The practice also has a presence in Phoenix with five doctors across four locations, which includes a new North Phoenix location, a brick-andmortar building in Peoria, and two mobile surgical units.

Known for its mobile units, Dr. Kelly’s model enables them to better serve Tucson and Phoenix, thanks to business partners across the areas.

Patriquin said the addition of the brick-and-mortar practices allows their company even more flexibility and “gross potential.” With the expandability of the new facil-

ities, they will be able to have more doctors to accommodate pet owners across a wider geographic region.

Dr. Kelly’s Surgical Unit specializes in surgical care, including spays and neuters, dental work, extractions, bladder stones, mass and tumor removals, and surgeries like soft tissue and amputation.

The company’s mobile units provide amenities including an extensive surgical prep area, large surgical areas that accommodate two doctors, a recovery area for post-operative care, and a floor plan designed to house specialized services.

In this space, each doctor can perform over 18 surgeries per day.

Patriquin compares their model to traditional human medical care, like a specialist in comparison to a primary doctor.

“The trade-off is that we’re not your (general) wellness practice. We’re not doing routine six-month bloodwork, urinalysis, ear infections,” he said. “For us, the high-value health intensive services are the trade-off of doing everything.”

Unlike most veterinary practices, Dr. Kelly’s offers surgical care at affordable prices.

The company’s goal is to allow owners to receive the treatments they want without having to make the considerable financial sacrifices requested by many traditional veterinarian offices — which is timely considering pet ownership’s costliness and increasing popularity due to people working from home.

“The vast majority of the clients we see take good care of

their animals, but they bristle at big numbers, is what it comes down to,” Patriquin said.

In comparison to a traditional full-service vet, Dr. Kelly’s offers surgical care at a third to a half of the typical price.

A release stated that ER vet bills ranged from $150 to $1,200 in 2022.

“When you couple the efficiency of just doing surgeries, not adding on all of the fitness and wellness exams, we can be very efficient. So we found that to be fast. We can save our time and effort by the doctor and pass those savings on to clients,” Patriquin said.

“The fact that we’re able to continue to grow; continue to provide a low-cost, affordable model; and still survive and grow as a business is a testament to not only that the clients are there but that it’s possible,” he added. “Not everything has to be a massive four-digit number just to get routine care.”

The Patriquins founded Dr. Kelly’s Surgical Unit in 2016.

A 1997 Colorado State University graduate, Kelly worked for a number of clinics over the years but always had a particular passion for surgery.

The husband-and-wife team sought to establish a veterinary clinic that could serve more pets, and realized that there was a big market for the affordability model they had created. Quickly, they collected a handful of locations.

Over the past seven years, the clinic has performed over 100,000 pet surgeries, assisted more than 150,000 clients and served nearly 80 pet rescue organizations.

The clinic saw a 60% expansion in 2022, 50% in 2021 and 160% in the previous three years.

“The industry is growing, expanding; it’s getting expensive; doctors and staff are hard to find. That’s why you can’t get an appointment at a practice,” Patriquin said. “It’s hard — they’re all full, the pet space is growing, and the demand for vets is not really keeping up. But it’s great that we’re able to help as many people as possible get the care that their pets need at the surgical level.”

(Holly Morgan Media/Submitted)

Dr. Kelly’s Surgical Unit is a specialized veterinary practice in the Phoenix and Tucson metropolitan areas. The company operates primarily from mobile units, providing convenient, affordable surgical and dental care for dogs and cats.

Business & Industrial Parks

5

792-3113 snowskiertucson@gmail.com gricoa.com

6

907-4983 dave@tucsonindustrialrealty.com tucsonindustrialrealty.com

1 Previously UA Office of University Research Parks

Ranked by the total leasable square footage

Ranked information is provided by business representatives at no charge and is ranked alphabetically in case of ties. Other businesses were contacted but either declined or did not respond by deadline. There is no charge to be included in Inside Tucson Business listings. N/A=not provided WND=would not disclose NL=not listed last year NR=listed last year but ranking criteria not provided

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