Class A Regional Center with National Tenant Lineup in Tucson for Sale

Wednesday, June 26, 2019

Holliday Fenoglio Fowler, L.P. (HFF) is marketing a 716,704-square-foot, market-leading, grocery-anchored retail center for sale in an infill location in Tucson, Arizona. Completed in 2001, Tucson Spectrum is 88% occupied and anchored by a diverse group of market-leading national retail tenants, which provides consumers a complete shopping experience that caters to the dense population within a 10-mile radius. The retail property offers investors the opportunity to acquire a best-in-class regional center with long-term income stability from premier national credit tenants and additional upside through the lease-up of available space, vacant pad development and optionality to sell off large or small portions of the property.

Prominently located adjacent to Interstate 19, Tucson Spectrum is exposed to more than 126,000 vehicles per day with more than 4,300 linear square feet of freeway visibility and is the first – and last – major shopping center for cross-border consumers. Tucson Spectrum is located seven miles from the University of Arizona, the No. 1 ranked public university in the state last year with an enrollment of more than 45,000 students. Less than 20 minutes from the property, the university is spearheading the mixed-use additions to the UA Tech Park, which will total $2 billion at buildout and provide office space for more than 6,000 employees. Raytheon Missile Systems, Tucson’s second largest employer with 11,370 employees, is just five miles from the retail center.

Tucson Retail Property for Sale Investment Highlights

  • Diverse and Synergistic Tenant Roster:  Approximately 96% of the leased square footage comprises national or regional tenants. The well-rounded tenant roster drives the critical mass necessary to support a center of this scale. Tenants include Food City, Harkins Theatre, Bed Bath & Beyond, Ross Dress for Less, Best Buy, Marshalls, OfficeMax, LA Fitness, PetSmart, Old Navy, Party City and JCPenney (ground lease) along with Target and Home Depot shadow anchors.
  • Secure Income Stream with Nationally Recognized Tenants:  The center is the regional draw with a recently remodeled Target, Harkins Theater and a Food City grocery anchor. The property provides stable in-place cash flow with only 12% of the rent roll expiring in the first three years and a weighted average lease term of six years. In addition, retailers who occupy more than a half million square feet of space have been tenants for more than 10 years.
  • Significant Value Add Through Lease-Up and Pad Sales:  At 88% occupied, Tucson Spectrum provides additional upside through lease-up of the remaining vacant shop space and one junior anchor box. The property has six individually parceled, undeveloped pads that can be developed or sold off and provides further upside for the next investor to bring retail or hospitality uses to the shopping center.
  • Functional and Flexible Format with Tremendous Visibility and International Draw:  The property benefits from outstanding visibility via Interstate 19, which runs along the west perimeter of Tucson Spectrum, and more than 4,300 feet of freeway frontage. Bounded by Irvington Road to the north, Calle Santa Cruz to the west and Drexel Road to the south, the property is exposed to more than 126,000 vehicles per day. Additionally, the center is less than an hour from Nogales, Mexico, the most trafficked port of entry into Arizona, and Tucson Spectrum is the first – and last – major shopping center for cross-border consumers. The Tucson International Airport, which services 3.6 million passengers annually, is located 5.6 miles from the property.
  • Severely Underserved Market with Limited Competition:  Tucson Spectrum is the only center with nationally recognized tenants for 15 miles on Interstate 19 and the only complex of this scale along the entirety of this highway. A lack of shopping centers south of Route 86 and Interstate 10 increase the radius of the Tucson Spectrum’s demographic draw.

The property is being delivered free and clear of existing financing, providing investors the opportunity to take advantage of the low interest rate environment and enhanced leveraged returns. To learn more about this Class A regional retail center in Tucson, Arizona, or other commercial real estate listing in Arizona and the Southwest, please contact Bryan Ley, Patrick Dempsey or Tony Ensbury. To view HFF’s current real estate investment sales listings, please click here.

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