Article posted in Inside Tucson Business here.
Know your company’s commercial real estate needs under several scenarios so you can react quickly to changing economics.
“Where do we go from here?” This is something we at the Commercial Real Estate Group of Tucson have been hearing as well as thinking about after the surprising election of Donald Trump as the next president of the United States.
So much is unknown and so much could change—or not—in a Trump administration backed by his party’s control of the Congress.
Early on we can guess on some of the winners and losers for the Tucson economy and for businesses who need to decide what to do about their Tucson office space, retail space or industrial space. Our short advice on that matter: Take stock now and prepare to react to change.
If Trump is able to make good on his policy ideas that he put forth in his campaign, we already see how they affect Tucson commercial real estate.
Aerospace and defense. The category of aircraft products and parts is Tucson’s top job generator among advanced technologies found in the metropolitan area. Tucson is a specialized center for the industry. And aerospace and defense is one of Tucson’s major industries. An expanded and updated military bodes well for locating and expanding industry businesses into the area.
Trade with Mexico. Changes to NAFTA could significantly affect Tucson and Arizona. We already are part of a robust bi-national economic region with Mexico. Companies move to and expand operations in Tucson to be close to their Mexican and Latin American operations and suppliers. They tap into Tucson’s high technology and workforce expertise to better run their operations on both sides of the border. And the area’s central location with a thriving transportation and logistics industry allows goods to move to global markets.
Made in the U.S.A. That same transportation and logistics infrastructure can grow if domestic manufacturing ramps up. But any growth could be moderated if trade with Pacific Rim countries is reduced.
Clean energy. Tucson is a specialized area for the solar energy industry. If Trump policy moves away from addressing climate change and energy efficiency, the manufacturing elements in Tucson could contract.
How do you deal with the uncertainty of a new president who has pledged to make many changes in current policy?
When it comes to Tucson commercial real estate, we advise that you research where your business stands today and where it might go as conditions change.
Workforce. Will it increase or decrease within the changing landscape? Do you have the space to accommodate fast growth in needed employees? Will your spacious location become a financial liability if you need to cut back on positions?
With salary and leave changes coming in Arizona because of the passage of Proposition 206, what size of workforce have you already determined you can have?
Operations. Do you have the right space to contract or expand your manufacturing or warehousing needs? Are there technological efficiencies you can easily adopt if you needed to? Is your business in the right place to take advantage of transportation to move your goods?
Take a look at other businesses that may share your building. How would they be affected by policy changes? If many leave or close, does that give you room to expand?
Does your current lease agreement protect you from CAM (common area maintenance) costs increasing based on the number of tenants? We recommend you look at your CAM statement every year to keep down costs. This could be more important than ever if some of the Trump policies affect the general economy such as a slow-down or job growth.
While we don’t have a crystal ball to predict what happens, as expert tenant representatives we can assess your Tucson commercial property needs and provide you a broad look at the present and future commercial real estate market.
Commercial Real Estate Group of Tucson specializes in representing tenants and corporate users across the United States, Latin America, Europe and Asia as a member of ITRA. For more information call +1-520-299-3400.