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A M U L T I - H O U S I N G R E D E V E L O P M E N T O P P O R T U N I T Y
E A S T P I M A S T R E E T + N O R T H C O U N T R Y C L U B R O A D | T U C S O N , A R I Z O N A
O F F E R I N G M E M O R A N D U M
Tangerine Road
Naranja Drive
Overton Road
Magee Road
Hardy Road
Moore Road
ORO VALLEY
CATALINA
Magee Road
Cortaro Farms Road
Linda Vista Boulevard
Lambert Lane
Dove Mountain Road
Tangerine Road
Avra Valley Road
Twin Peaks Road
Broadway Boulevard
Sixth Street
Speedway Boulevard
Grant Road
Fort Lowell Road
Prince Road
River Road
Wetmore Road
Orange Grove Road
TUCSON
Ina Road
Golf Links Road
Ajo Way
Valencia Road
Irvington Road
Drexel Road
Valencia Road
Ajo Way
22nd Street
Tanque Verde Road
Valencia Road
Escalante Road
Irvington Road
Los Reales Road
Sunrise Drive
CATALINA FOOTHILLS
Davis-MonthanAirforce Base
Tucson International Airport
DOWNTOWN
La ChollaAirpark
Fifth Street
Speedway Boulevard
Grant Road
Limberlost Road
Snyder Road
Ina Road
St. Mary’s RoadAnklam Road
Speedway Boulevard
Ironwood Hill Drive
Sweetwater Drive
Tanque Verde Road
210
77
86
19
10
10
10
HAMID PANAHIFirst Vice President [email protected]: AZ SA550601000
MARCUS & MILLICHAPMarcus & Millichap | One South Church, Suite 1262 | Tucson, Arizona | 85701
JAMES CR AWLE YAssociate520.719.6512 [email protected]: AZ SA659077000
E XCLUSIVELY LISTED BY
Tangerine Road
Naranja Drive
Overton Road
Magee Road
Hardy Road
Moore Road
ORO VALLEY
CATALINA
Magee Road
Cortaro Farms Road
Linda Vista Boulevard
Lambert Lane
Dove Mountain Road
Tangerine Road
Avra Valley Road
Twin Peaks Road
Broadway Boulevard
Sixth Street
Speedway Boulevard
Grant Road
Fort Lowell Road
Prince Road
River Road
Wetmore Road
Orange Grove Road
TUCSON
Ina Road
Golf Links Road
Ajo Way
Valencia Road
Irvington Road
Drexel Road
Valencia Road
Ajo Way
22nd Street
Tanque Verde Road
Valencia Road
Escalante Road
Irvington Road
Los Reales Road
Sunrise Drive
CATALINA FOOTHILLS
Davis-MonthanAirforce Base
Tucson International Airport
DOWNTOWN
La ChollaAirpark
Fifth Street
Speedway Boulevard
Grant Road
Limberlost Road
Snyder Road
Ina Road
St. Mary’s RoadAnklam Road
Speedway Boulevard
Ironwood Hill Drive
Sweetwater Drive
Tanque Verde Road
210
77
86
19
10
10
10
TABLE OF CONTENTS
M A R K E T O V E R I E W
PAGE 2005
T H E O P P O R T U N I T Y
PAGE 401 I N V E S T M E N TR A T I O N A L E
PAGE 602T H E
VA L U A T I O NPAGE 1603 C A S E
S T U D I E SPAGE 1804
4
OFFERING MEM
ORANDUM
P I M A C A M I L L A
1 2 2 - 1 7 - 3 93 0
1 2 2 - 1 7 - 3 94 01 2 2 - 1 7 - 3 95 0
1 2 2 - 1 7 - 4 0 0 0Price Market
Location University/North Central Submarket
Address E-SEC North Country Club Road + East Pima Street
Parcel Numbers 122-17-3930, 122-17-3940, 122-17-3950, 122-17-4000,
122-17-3740
Zoning O-3, R-3
Site Acerage 2.67 Acres
Total Square Footage 116,396 SF
OFFERING + PRICING SUMMARY
PIMA STREET CAMILLA BOULEVARD
COUNTRY CLUB ROAD
5T H E O P P O R T U N I T Y
1 2 2 - 1 7 - 4 0 0 0
1 2 2 - 1 7 - 3 7 4 0
PARCEL ENTITLEMENTS
ParcelNumber Acreage Zoning Density Maximum
UnitsMaximum Lot
CoverageMaximum
Height
122-17-3930 0.70 O-3 22/acre 15 75% 40 feet
122-17-3940 0.71 O-3 22/acre 16 75% 40 feet
122-17-3950 0.44 R-3 36/acre 16 70% 40 feet
122-17-4000 0.28 R-3 36/acre 10 70% 40 feet
122-17-3740 0.55 R-3 36/acre 20 70% 40 feet
Total 2.67 76
Marcus & Millichap is pleased to present the opportunity to acquire a multifamily
redevelopment site in central Tucson. The site is comprised of 2.67 acres and enjoys
immediate frontage on Pima Street. Currently, the site features a fully occupied 16-unit
community which will provide future ownership with revenue during redevelopment
preparation. Additionally, the site provides the opportunity to receive developer
credits from impact fees, sewer fees, and existing water meters; totaling approximately
$408,862. The current zoning allows a maximum height of 40 feet, making it an ideal
site to develop a market rate or student housing community with approximately 76
units. Once fully redeveloped, the building will be complimentary to the surrounding
area, enhancing community offerings while providing tenants a trophy location.
OVERTURECAMILLA BOULEVARD
6
OFFERING MEM
ORANDUM
P I M A C A M I L L A
OVERVIEW
MARKET R ATE
MARKET R ATE
STUDENT HOUSING
STUDENT HOUSING
MULTIFAMILY DEVELOPMENT PIPELINE
PROPERTIES UNITS AVG. YEAR BUILT AVG. UNIT SF AVG. RENT PER UNIT
59 5,414 1974 690 $688
52 4,652 1973 670 $680
7 762 1983 834 $921
TOTALPROPERTIES
UNDER CONSTRUCTION PRE-CONSTRUCTION
MARKET RATE UNDER CONSTRUCTION
STUDENT HOUSING UNDER CONSTRUCTION
6 4 2 243 UNITS 594 UNITS
OF SURROUNDING PROPERTIES BUILT PRE-1990 WITH ONLY 1 PROPERTY
(78 UNITS) BUILT SINCE 2000
96%
OF SURROUNDING PROPERTIES BUILT PRE-1990 WITH ONLY 2 PROPERTIES
(342 UNITS) BUILT SINCE 2000
71%
S U R R O U N D I N G M U LT I F A M I LY2 - M I L E R A D I U S | 4 0 + U N I T S
Source: Apartment Insights, 2019
7I N V E S T M E N T R A T I O N A L E
2014Q1
2016Q3
2014Q3
2017Q1
2015Q1
2017Q3
2015Q3
2018Q1
2016Q1
2018Q3
2014Q2
2016Q4
2014Q4
2017Q2
2015Q2
2017Q4
2015Q4
2018Q2
2016Q2
2018Q4
UNIVERSITYSUBMARKET
NORTH CENTRAL SUBMARKET
UNIVERSITYSUBMARKET
NORTH CENTRAL SUBMARKET
SUBMARKET VACANCY COMPARISON2014-2018
Tangerine Road
Naranja Drive
Overton Road
Magee Road
Hardy Road
Moore Road
ORO VALLEY
CATALINA
Magee Road
Cortaro Farms Road
Linda Vista Boulevard
Lambert Lane
Dove Mountain Road
Tangerine Road
Avra Valley Road
Twin Peaks Road
Broadway Boulevard
Sixth Street
Speedway Boulevard
Grant Road
Fort Lowell Road
Prince Road
River Road
Wetmore Road
Orange Grove Road
TUCSON
Ina Road
Golf Links Road
Ajo Way
Valencia Road
Irvington Road
Drexel Road
Valencia Road
Ajo Way
22nd Street
Tanque Verde Road
Valencia Road
Escalante Road
Irvington Road
Los Reales Road
Sunrise Drive
CATALINA FOOTHILLS
Davis-MonthanAirforce Base
Tucson International Airport
DOWNTOWN
La ChollaAirpark
Fifth Street
Speedway Boulevard
Grant Road
Limberlost Road
Snyder Road
Ina Road
St. Mary’s RoadAnklam Road
Speedway Boulevard
Ironwood Hill Drive
Sweetwater Drive
Tanque Verde Road
210
77
86
19
10
10
10
STRATEGICALLY POSITIONED TO CAPITALIZE ON
UNIVERSITY SUBMARKET RENTS WHILE
MAINTAINING STABLITIY OF NORTH CENTRAL TUCSON
8
OFFERING MEM
ORANDUM
P I M A C A M I L L A
SOURCE: ALTERYX, 2017A-2022, PIMA CAMILLA, 1-MILE RADIUS
PIMA CAMILL A 1-MILE DEMOGR APHICS[1]
P O P U L A T I O N2018 2022
17,117 17,056
M E D I A N A G E2018 2022
34 34
A V E R A G E I N C O M E2018 2022
$51,153 $59,571
M E D I A N I N C O M E2018 2022
$33,318 $38,803
% W H I T E C O L L A R2018 2022
62.34% 60.87%
B A C H E L O R S D E G R E E +2018 2022
44.70% 44.80%
R E N T E R O C C U P I E D2018 2022
67.10% 67.86%
1 5 M I N U T E B I K E - R I D E R A D I U S
[1] 2022 demographics represent projected values
9I N V E S T M E N T R A T I O N A L E
A landmark of Tucson healthcare since 1944, Tucson Medical Center is a
leading provider of emergency, women’s and maternity care, pediatrics,
and many other specialty areas.
EMPLOYEES: ±3,800
DISTANCE FROM PROPERTY: 3.3 MILES
Beacon Group is a national rehabilitation service leader creating
opportunities for people with disabilities through innovative business
solutions, community rehabilitation, and employment choices.
EMPLOYEES: ±660
DISTANCE FROM PROPERTY: 4.0 MILES
Founded in Tucons in 1948, Kalil Bottling Co. bottles and distributes
beverages for nationally recognized brands including Monster Energy,
Canada Dry, Snapple, and RC Cola.
EMPLOYEES: ±330
DISTANCE FROM PROPERTY: 3.9 MILES
1 5 M I N U T E B I K E - R I D E R A D I U S
Source: Arizona Council of Governments, 2019BikeCitizens.net, 2019
1 0
OFFERING MEM
ORANDUM
P I M A C A M I L L A
SOUTHWEST
DOWNTOWN TUCSON±4.4M sf;
office, retail
BLENMAN ELM ELEMENTARY
SCHOOL
±44,831 Students. ±15,623 Faculty + Staff
1 1I N V E S T M E N T R A T I O N A L E
SOUTHWEST
HISTORIC ARIZONA INN
AE
RIA
L O
BL
IQU
E
SO
UT
HW
ES
T
PIMA STREET
COUNTRY CLUB ROAD
ELM STREET
10
±4,500 Employees
1 2
OFFERING MEM
ORANDUM
P I M A C A M I L L A
B A N N E R U M C T U C S O N/ / L ar ge s t Pr i v ate Employer in Ar i zona
/ ±6,000 Employee s in Tuc son/ ±4,500 Employee s at Banner - UMC Tuc son
/ / Mer ged w it h U A He alt h Net wor k in 2015/ 2 Hospit als/ 5 Ur gent C ar e Cl inic s/ ±40 Medic al Of f ic e s + Out pat ient Cl inic s
Distance From Property: 1.3 Miles
1 3I N V E S T M E N T R A T I O N A L E
BANNER - UNIVERSITY MEDICAL CENTEREXPANSION
// 204-Bed Patient Tower// ±689,000 SF Added or Renovated
/ Patient Rooms/ Clinical Labs/ Academic Research Space
// Projected Econmic Impact: $500M// Expected Completion: Spring 2019
±$1.05 BILLION
INVESTED IN TUCSON SINCE 2015
UA HE ALTH NET WORK MERGER
BANNER - UMC TUCSON RENOVATION
BANNER UNIVERSIT Y MEDICINE NORTH E XPANSION
TUCSON MEDICAL RECORD DIGITAL CONVERSION
DATE CAPITAL
2015 ±$467,000,000
2016-2019 ±$442,800,000
2018 ±$98,000,000
2016-2017 $45,000,000
B A N N E R H E A LT HC A P I T A L I N F U S I O N
2 0 1 5 - C U R R E N T
Source: Arizona Daily StarAZ Central
Banner Health
1 4
OFFERING MEM
ORANDUM
P I M A C A M I L L A
U N I V E R S I T Y O F A R I Z O N A
ENROLLMENT
BED COUNT
2018-2022GROWTH (#)
2018-2022GROWTH (%)
1,625 24%
1,233 18%
On-Campus Housing Demand Will Outpace
University Housing Growth by Nearly 400 Beds by 2022.
TOTAL ENROLLMENT
UNIVERSIT Y HOUSING (BEDS)
ON CAMPUS HOUSING POTENTIAL[1]
2018CURRENT
2020GOAL
2022GOAL
44,831 51,445 55,468
6,849 7,826 8,082
15.28% 15.21% 14.57%[1] Assumes 100% Occupancy
1 5I N V E S T M E N T R A T I O N A L E
FACULTY + STAFF±15,623
STUDENT ENROLLMENT±44,831
ECONOMIC IMPACT±$8.3B
DISTANCE FROM PROPERTY: 1.8 MILES
Source: University of Arizona Fact Book, 2019Axiometrics, University of Arizona, 2019
UNIVERSIT Y OF ARIZONA
STATS
1 6
OFFERING MEM
ORANDUM
P I M A C A M I L L A
Unit Address Unit Description Unit Count Unit Mix Square
FeetNet Rentable Square Feet
Mkt. Rent per Unit
Mkt. Rent per SF
Gross Potential
Net Effective per Unit
Net Effective per SF
Monthly Rent
1625 N Camilla #5AB Studio 2 13% 318 636 $455 $1.43 $910 $455 $1.43 $910
3122 E Pima Studio 1 6% 341 341 $505 $1.48 $505 $505 $1.48 $505
3124 E Pima A Studio 1 6% 373 373 $513 $1.38 $513 $513 $1.38 $513
3124 E Pima C Studio 1 6% 417 417 $515 $1.24 $515 $515 $1.24 $515
3124 E Pima B 1 Bed 1 Bath 1 6% 530 530 $715 $1.35 $715 $715 $1.35 $715
1625 N Camilla #2 1 Bed 1 Bath 1 6% 558 558 $625 $1.12 $625 $625 $1.12 $625
1625 N Camilla #1 1 Bed 1 Bath 1 6% 607 607 $675 $1.11 $675 $675 $1.11 $675
1625 N Camila #4 1 Bed 1 Bath 1 6% 650 650 $665 $1.02 $665 $665 $1.02 $665
3124 East Pima D 1 Bed 1 Bath 1 6% 662 662 $710 $1.07 $710 $710 $1.07 $710
3108-3110 E Pima 2 Bed 1 Bath 2 13% 783 1,566 $830 $1.06 $1,660 $823 $1.05 $1,645
3126-3128 E Pima 2 Bed 1 Bath 2 13% 788 1,576 $770 $0.98 $1,540 $770 $0.98 $1,540
1625 N Camilla #3 2 Bed 1 Bath 1 6% 918 918 $825 $0.90 $825 $825 $0.90 $825
3120 East Pima 1 Bed 1 Bath 1 6% 1,447 1,447 $865 $0.60 $865 $865 $0.60 $865Total / Average Total / Average 16 100% 643 10,281 $670 $1.04 $10,723 $669 $1.04 $10,708
UNIT MIX SUMMARY MARKET AND NET EFFECTIVE RENTS AS OF FEBRUARY 1ST, 2019
*All square footages are approximate
HISTORICAL OPERATING PERFORMANCE AND INVESTMENT PRO FORMA UNDERWRITING
Trailing 12 Months ActualJAN 2018 - DEC 2018
90-Day AnnualizedOCT 2018 - DEC 2018
60-Day AnnualizedNOV 2018 - DEC 2018
30-Day AnnualizedDEC 2018 Investment Pro Forma
INCOME Per Unit Per Unit Per Unit Per Unit Per Unit
All Units at Market Rent 128,676 8,042 128,676 8,042 128,676 8,042 128,676 8,042 128,676 8,042
Projected Increase to Market Rents 6,434 5.00%
GROSS POTENTIAL RENT $128,676 $8,042 $128,676 $8,042 $128,676 $8,042 $128,676 $8,042 $135,110 $8,444ECONOMIC LOSSES
Vacancy Loss (7,689) 5.98% (500) 0.39% (659) 0.51% (180) 0.14% (5,404) 4.00%NET RENTAL INCOME $120,987 $7,562 $128,176 $8,011 $128,017 $8,001 $128,496 $8,031 $129,705 $8,107OTHER INCOME
Utility Reimbursement 11,794 737 11,794 737 11,794 737 11,794 737 12,148 759Miscellaneous 2,518 157 2,518 157 2,518 157 2,518 157 2,518 157
Total Other Income[1] $14,313 $895 $14,313 $895 $14,313 $895 $14,313 $895 $14,666 $917
EFFECTIVE GROSS INCOME $135,300 $8,456 $142,489 $8,906 $142,329 $8,896 $142,809 $8,926 $144,372 $9,023
EXPENSESGeneral & Administrative 484 30 484 30 484 30 484 30 484 30Marketing & Promotion 3,530 221 3,530 221 3,530 221 3,530 221 3,530 221Repairs & Maintenance 12,653 791 12,653 791 12,653 791 12,653 791 12,653 791Turnover 2,314 145 2,314 145 2,314 145 2,314 145 2,314 145
Contract Services 4,594 287 4,594 287 4,594 287 4,594 287 4,594 287
Controllable Expenses Subtotal $23,575 $1,473 $23,575 $1,473 $23,575 $1,473 $23,575 $1,473 $23,575 $1,473Utilities 16,957 1,060 16,957 1,060 16,957 1,060 16,957 1,060 17,465 1,092Management Fee 0 0 0 0 0 0 0 0 10,106 632Real Estate Taxes 10,145 634 10,145 634 10,145 634 10,145 634 9,846 615Insurance 4,088 255 4,088 255 4,088 255 4,088 255 4,088 255
TOTAL OPERATING EXPENSES[2] $54,765 $3,423 $54,765 $3,423 $54,765 $3,423 $54,765 $3,423 $65,080 $4,067 Reserves & Replacements[3] 4,000 250 4,000 250 4,000 250 4,000 250 4,000 250TOTAL EXPENSES $58,765 $3,673 $58,765 $3,673 $58,765 $3,673 $58,765 $3,673 $69,080 $4,317NET OPERATING INCOME $76,535 $4,783 $83,724 $5,233 $83,564 $5,223 $84,044 $5,253 $75,292 $4,706
[1] Trailing 12 months Other Income has been inserted into all of the historical operating performance columns to more accurately reflect Net Operating Income.[2] Trailing 12 months Operating Expenses have been inserted into all of the historical operating performance columns to more accurately reflect Net Operating Income.[3] Reserves & Replacements have been inserted into the historical operating performance and investment pro forma to illustrate an undistorted comparison of Net Operating Income.
1 7T H E VA L U A T I O N
CREDITS TO POTENTIAL DEVELOPERS
THE SITE PRESENTS THE OPPORTUNITY FOR NEW OWNERSHIP TO REDEVELOP AND TAKE ADVANTAGE OF SEVERAL DEVELOPMENT CREDITS AND OFFSETS FROM CURRENT INFRASTRUCTURE:
• IMPACT FEE CREDITS (OFFSETS) FOR 27 EXISTING UNITS (16 UNITS IN OPERATION)
• THREE COMMERCIAL WATER METERS PLUS OTHER RESIDENTIAL METERS THAT MAY BE UTIL IZED OR EXCHANGED FOR CREDIT TOWARDS NEW METERING.
• SEWER CONNECTION FEE CREDITS (BASED ON PRESENT NUMBER OF UNITS/WATER METERS)
• ABIL ITY TO UTIL IZE MULTIPLE EXISTING HCS'S FOR NEW DEVELOPMENT
• ABIL ITY TO RETURN OLD GRANDFATHERED ONSITE WELL TO SERVICE.
Impact Fees (Credit) $171,515
Sewer Connection Fee (Credit) $184,173
Water Meters $ 53,174
$408,862
1 8
OFFERING MEM
ORANDUM
P I M A C A M I L L A
M A R K E T R A T E
UNIT MIX & RENTAL RATESFloor Plan Units % SF[2] Market
Rent/UnitMarket Rent/SF
Studio 12 14% 479 $1,184 $2.47
Studio 9 11% 733 $1,623 $2.21
1 Bdr 1 Bath 10 12% 695 $1,653 $2.38
1 Bdr 1 Bath 12 14% 826 $1,790 $2.17
1 Bdr 1 Bath 4 5% 832 $1,915 $2.30
1 Bdr 1 Bath 6 7% 837 $1,826 $2.18
2 Bdr 2 Bath 20 24% 1,180 $2,223 $1.88
2 Bdr 2 Bath 8 9% 1,227 $2,064 $1.68
3 Bdr 2 Bath 4 5% 1,604 $2,995 $1.87
Total / Wtd Avg 85 100% 910 $1,863 $2.05
NOTES [1] The rent schedule above illustrates the average rent for each floor plan based on the current low and high rent for available units listed on Apartment Insights.[2] Unit square footage represents a weighted average between the three properties for each floor plan.
Units 85
Year Built 2014/2016/2017
Physical Occupancy 98%
Construction Style Mid-Rise
O N E W E S T | O N E E A S T | T W O E A S T C O N G R E S S1 E A S T B R O A D W A Y | T U C S O N , A R I Z O N A
OWNER: PRIVATE PARTY
MANAGED BY:PRESIDIO MANAGEMENT AREA DEMOGRAPHICS
1-MILE RADIUS
AVG. INCOME$38,632
RENTER OCCUPIED HOUSING79%
WHITE COLLAR EMPLOYMENT60%
1 9C A S E S T U D I E S
S T U D E N T H O U S I N G
UNIT MIX & RENTAL RATESFloor Plan Units % SF Market
Rent/Unit[2]Market Rent/SF
1 Bdr 1 Bath 4 5% 694 $1,389 $2.00
2 Bdr 2 Bath 16 21% 830 $1,700 $2.05
2 Bdr 2 Bath 7 9% 872 $1,790 $2.05
3 Bdr 3 Bath 15 20% 1,106 $2,310 $2.09
4 Bdr 4 Bath 27 36% 1,373 $2,756 $2.01
4 Bdr 4 Bath 7 9% 1,498 $2,880 $1.92
Total / Wtd Avg 76 100% 1,136 $2,296 $2.02
NOTES [1] The rent schedule above illustrates the average rent for each floor plan based on the current low and high rent for available units listed on Apartment Insights.[1] Market rent per unit average represents the total per bed rent for each floor plan.
Units 76
Year Built 2014
Physical Occupancy 99%
Construction Style Mid-Rise
T H E J U N C T I O N A T I R O N H O R S E5 0 4 E A S T 9 T H S T R E E T | T U C S O N A R I Z O N A
OWNER: PIERCE EDUCATION PROPERTIES
MANAGED BY:OWNER AREA DEMOGRAPHICS
1-MILE RADIUS
AVG. INCOME$38,740
RENTER OCCUPIED HOUSING79%
WHITE COLLAR EMPLOYMENT62%
2 0
OFFERING MEM
ORANDUM
P I M A C A M I L L A
TUCSON MSAWith a diverse cross-section of prospering businesses spanning healthcare, education, software,
defense, world-class travel and tourism, and a growing presence of “clean” manufacturing,
the Tucson region is emerging as a major industrial center in the Southwest. The metro has
solidified itself as a knowledge based economy specializing in sectors at an unparalleled level.
Aerospace, defense, healthcare, and education have found Tucson home. The clear skies and
elevation are prime environments for both solar-technology and space research. Tucson was
ranked 6th on a list of top 10 metro areas for aerospace/defense manufacturing (Business
Facilities Magazine, 2011). In May 2010, Forbes ranked Tucson as one of “America’s Most Innovative
Cities.” Based on patents produced per capita, venture capital investment, and ratios of high-
tech, science, and “creative class” jobs, The city benefits from its major military installations,
prominent aerospace industries, innovative high-tech companies, and leading medical research,
including The University of Arizona, which is currently ranked among the top 20 public research
universities nationwide. Currently, it is estimated that over 1,200 high-tech cluster companies
employ 50,000 people in the region, generating annual revenues of $6 billion.
2 1M A R K E T O V E R V I E W
Tucson MSA Household Snapshot
2000
388,046
2010
454,962
2015
465,705
2020PROJECTION
495,913
Tucson MSA Population Snapshot
2000
999,866
2010
1,159,029
2015
1,185,276
2020PROJECTION
1,258,297
SOURCE: ALTERYX, 2016, TUCSON MSASOURCE: ALTERYX, 2016, TUCSON MSA
T U C S O N : E M E R G I N G T E C H H U B O F S O U T H W E S T
15.7 PATENTS PER CAPITANEARLY DOUBLE ARIZONA AVERAGE (8 .8) AND INCREASED BY 8 .1 SINCE 2000 (7.6)
SAN DIEGO
Tucson has become a flourishing technology hub with a growing
concentration of educators, entrepreneurs, world-class physicians,
artists, and engineers. This new socioeconomic class, the Creative
Class, has benefited from technology allowing people to work from
anywhere. These creative professionals have sought out specific
cities with big businesses following suit to capture this creative
talent across the country. These cities, like Tucson, are the social
and economic platforms that enable talented people to combine
their talents and ideas in ways that generate new technologies and new companies,
which in turn create new jobs, generating wealth and prosperity. The University of Arizona
has been pivotal in the growth of this culture. Extensive research in optics, astronomy,
engineering, healthcare, biomedical engineering, and a flourishing arts program has beget
the fruition of a flourishing economic environment in Tucson. This is exemplified in new
start-up companies, co-work space developing downtown, a higher patent per capita
ratio than nearly all Western cities, and the announcement of major businesses moving
to Tucson to capture the creative talent pooling in the Old Pueblo.
RANKED 20TH
U.S. METRO FOR CREATIVE CLASSPROFESSIONALS
SOURCE: FLORIDA, RISE OF THE CREATIVE CLASS, 2012
FLOURISHING DESERT
DEMOGRAPHICSTucson MSA is home to an estimated 1,182,128 residents with a projected 5
year population growth of 6.00% (1,253,015). Population growth from 2000 to
2010 exploded by 16.8% across Tucson MSA instilling itself as a regional center
for commerce, learning, research, and entertainment. The 2016 median age
in the metropolitan area is 38.1 years. The median annual
household income in 2016 within the Tucson metro is $44,939.
Burgeoning technology sectors have attracted outside
creative talent as well as helped with the retention of
students from the University post-graduation. Household
growth in the Tucson has consistently outpaced the national
average and future expansion is forecast at approximately
two times the U.S. average. Nearly year-round sunshine
attracts retirees from across the nation further bolstering the city’s population
numbers and inducing demand for both healthcare and entertainment options.
The University of Arizona and the high-tech community will continue to support
the prevalence of college-educated residents.
$44,939TUCSON MSA
MEDIAN INCOME(ALTERYX, 2015)
2 2
OFFERING MEM
ORANDUM
P I M A C A M I L L A
Greater Tucson enjoys a labor pool made up of more than 461,000 positions in the wake of
population growth that has led to increased employment, entrepreneurship opportunities,
and moderate salary increases. The region boasts a diverse cross-section of business
sectors, particularly health and education, state and federal government, aerospace and
defense manufacturing, and hospitality. A balance of both private and public employment
ensures a wealth of opportunities for Tucsonans across all demographic groups. Strong,
steady net in-migration has helped the retail and service sectors in Tucson prosper. The
goods-producing sector has had a strong, historical presence in Tucson consisting of
natural resources and mining. Due to high costs of operation in neighboring Western
Cities, particularly Southern California, businesses continue to flock to Tucson. These
employers settle due to the lower labor, utility, and material costs and a Regional
Development program which fosters a pro-business climate. Businesses can benefit
from favorable regional and state tax incentive programs.
EMPLOYMENT
Tucson MSA Largest EmployersRANKED BY NUMBER OF FULL-TIME EQUIVALENT ARIZONA EMPLOYEES
The aerospace and defense sector is a major contributor to the region’s economy. Tucson is ranked as one of the top 5 areas in the U.S. for these industries. The aerospace industry includes defense and space-related manufacturing, research and development, industrial technology, assembly, distribution, and warehousing. It also includes firms that maintain and rehabilitate the nation’s commercial aircraft fleet. The neighboring State of Sonora is quickly becoming one of Mexico’s biggest and most important aerospace clusters as well, making Tucson the closest major U.S. city to companies manufacturing there.
Tourism is a flourishing business with all the entertainment options Tucson has to offer. Near year-round sunshine incites the flock of winter visitors who seek out the myriad of options including hundreds of hiking trails, dozens of golf courses, cycling, and bird-watching. Tucson is also home to several major events, including the Tucson Gem, Mineral, and Fossil show, the largest of its kind, the Tucson Rodeo, El Tour de Tucson, and dozens of events held at the newly renovated Tucson Convention Center. Retail is also a major attraction for Sonoran and Sinaloan families who contribute $1 Billion annually in retail and tourism spending. Nearly 4 million overnight visitors annually help support the 21,000 tourism jobs in the region.
Southern Arizona boasts some of the most sophisticated healthcare available, including seven primary-care hospitals and the Southern Arizona Veterans Administration Medical Center. The world-class facilities of Tucson Medical Center, Banner Health’s (Formerly University Health Network) two Academic Hospitals and affiliated clinics, Carondelet Medical Group’s St. Mary’s, St. Joseph’s, Holy Cross, and Northwest Medical Center highlight the breadth and concentration of healthcare within the region. Life sciences programs at the University of Arizona are international leaders in scientific research and education. With access to cutting edge research facilities and staff, collaboration between higher education and biotechnology businesses attracts companies from start-ups to multinationals, including most recently, Ventana Medical Systems (a division of Roche group), Sanofi US, and the Critical Path Institute.
The University of Arizona’s focus on technology is a vital part of the development of the local economy, forging new ground with centers of excellence in optical research, photo-electronics, astronomy, hydrology and water resources, information systems, and sustainable systems. As a result, the Tucson region has fostered a vibrant entrepreneurial environment for launching and incubating early-stage technology companies. Innovation is also evident at the Critical Path Institute and BIO5, two bioscience entities utilizing revolutionary collaboration models. Both the Critical Path Institute and BIO5 fuel economic development by facilitating the commercialization of new products.
Education is a high priority in Southern Arizona. Highlighted by The University of Arizona, one of the nation’s top public research universities, Tucson is home to a wealth of education options. The University of Arizona is complemented by a K-12 public education system of 63 districts with over 236,000 students as well as 149 charter schools and more than 117 private, self-regulating elementary and secondary schools. In 2014, charter school Basis Tucson ranked No. 5 and in 2015 public school University High School ranked No. 17 on U.S. News and World Report’s list of the top 100 high schools in the country. Primary, secondary, university, vocational, and continuing education institutions in Southern Arizona all contribute to the goal of providing a qualified workforce.
In Southern Arizona, federal government employment consists primarily of jobs at Davis-Monthan Air Force Base and at the U.S. Border Patrol, the federal courthouse and FBI. The growing presence of the federal government in Tucson supports the nation’s national defense posture, homeland security strategy, and illegal immigration policies. State government employment is dominated by The University of Arizona. State administrative and educational functions account for much of the remaining employment in this sector. Over one-half of local government employment is related to education. Other local government employment is composed of law enforcement and administration.
1 THE UNIVERSITY OF ARIZONA±44,000
2 RAYTHEON MISSLE SYSTEMS±11,370
3DAVIS-MONTHAN AIR FORCE BASE ±10,235
4 PIMA COUNTY±7,100
5 U.S. BORDER PATROL±6,800
6TUCSON UNIFIED SCHOOL DISTRICT±6,467
7BANNER - UNIVERSITY OF ARIZONA HEALTH NETWORK±6,462
8 FREEPORT MCMORAN±5,819
9U.S ARMY INTELLIGENCE CENTER±5,096
10 STATE OF ARIZONA±4,986
11 WAL-MART±4,360
12 CITY OF TUCSON±4,348
HEALTHCARE + BIOMEDICAL
RESEARCH & DEVELOPMENT AEROSPACE + DEFENSE
EDUCATION
GOVERNMENT
HOSPITALITY + TOURISM
SOURCE: BUSINESS JOURNAL BOOK OF LISTS, AND REAL DATA ANALYTICS SOURCE: SUNCORRIDOR INC., CITY OF TUCSON
2 3M A R K E T O V E R V I E W
BIKE BOULEVARDS & DEDICATED BIKE LANES
// Over 700 Miles of dedicated bikeways
// More bicycle infrastructure than any other city in U.S.
// Over 5,600 downtown commuters bike to work ranking
Tucson 6th among large cities for % of bicycle commuters
TRANSPORTATIONNorth-south and east-west interstate highways, trans-national rail
infrastructure, and an international airport bode well for Tucson,and
make the region readily connected to the global marketplace.
Interstate 10 is one of only three coast-to-coast interstates in
the country, helping service travelers and distribution needs.
Interstate 19 branches off I-10 in downtown Tucson and goes
south to Nogales, Sonora, Mexico. Tucson’s growing international
business prowess is proving this route increasingly important with
international travelers coming for business, shopping, or vacation
as well as a key to international shipping. Intra-city travel has
become more advanced as Tucson recently completed its Sun
Link electric trolley system. The Sun Link works in sync with
Tucson’s prized Sun Tran bus system that is consistently ranked
one of the best in the country. Tucson International Airport (TIA)
offers nonstop service to 18 U.S. destinations as well as one-stop
connections to more than 310 destinations around the world. TIA
provides easy access to key destinations, including direct flights
to New York City and Washington, D.C. #6 Cyclist City in U.S. TRAVELCHANNEL.COM, 2016
SUNLINK STREET CAR
// Four-miles long with 18-stops between Downtown
and the Banner-University Medical Center in Midtown
// Total daily ridership: ± 4,000
// 100,000 people live within one-mile of route
TUCSON INTERNATIONAL AIRPORT
// Supports 35,000 jobs in the region
// Nonstop flights to 18 major cities in the U.S.
// More than 4 million overnight visitors arrive annually
CONTRIBUTES $3.2 BILLION ANNUALLY TO THE AZ ECONOMY
SOURCE: FLY TUCSON, 2016
SOURCE: DOWNTOWN TUCSON PARTNERSHIP 2015; TRAVELCHANNEL.COM 2016
SOURCE: VISIT TUCSON, 2016
SOURCE: VISIT TUCSON, 2016SOURCE: ARIZONA DAILY STAR, 2015
2 4
OFFERING MEM
ORANDUM
P I M A C A M I L L A
EDUCATIONIn Greater Tucson, several higher education options exist—most notably, The University
of Arizona (UA). UA is a leading public research university in the Southwest and
produces more than $530 million in annual research. The research enterprise provides
undergraduate students with opportunities for hands-on experiences that can be
found in few universities in the world. UA has an enrollment of more than 43,000
students across the 388-acre campus in 185 buildings. UA has also started satellite
installations throughout the state, furthering its footprint.
Ranked #20 in the U.S. for Public Research UniversitiesU.S. News and World Report, 2016
#4 Management Information Systems Program in NationU.S. News and World Report, 2016
#7 Entrepreneurship Program in Nation U.S. News and World Report, 2016
#67 Ranked University GloballyReuters, 2016
#40 Law School in the NationU.S. News and World Report, 2016
#1 Ranked University for Physical Sciences Research National Science Foundation, 2016
#6 Globally for Space SciencePrinceton Review, 2015
Top 10 Producer for Fullbright Scholars in NationThe University of Arizona, 2016
Member of Association of American Universities, 62 Leading Public and Private Universities The University of Arizona, 2016
Accolades
2 5M A R K E T O V E R V I E W
Nearly 365 days of sunshine, crisp high-desert air, and exceptional air quality make
Tucson an outdoors paradise with limitless opportunities. The myriad of natural
and man-made amenities culminate in a city readily offering a healthy and active
lifestyle. One of the top U.S. cities with respect to resorts and spas, The Ritz-Carlton
of Dove Mountain, for example, was distinguished by Travel + Leisure magazine as
one of the Top 100 Hotels in the World and is the only Arizona resort to receive the
“Forbes 5-Star Hotel” rating. Tucson is one of only 14 national cities to hold opera,
symphony, ballet, and theatre associations. Surrounded by four mountain ranges
and 37,000 acres of parkland and 510 miles of bike routes and bike lanes, there is
no shortage of adventure. Tucson is consistently ranked as one of the top cycling
cities in the United States. Tucson’s dedicated bike boulevards provide commuter
access to work or school as well as provide the battleground for the annual El
Tour De Tucson. A rich history of encompassing many cultures has developed a
fusion of flavors to create a truly unique dining experience in Tucson. The city
recently received a World City of Gastronomy designation by the United Nations
Educational, Scientific, and Cultural Organization, the only city in North America with
the prestigious designation. With a burgeoning culinary scene, Tucson is furthering
its reputation as a destination for epicures. Recreational opportunities include more
than 40 golf courses. Without the presence of a professional sports franchise,
The University of Arizona’s Intercollegiate Athletics program has a significant fan
base in Greater Tucson. The University of Arizona has captured 13 Team National
Championships and dozens of Pac-12 Conference Championships in its storied history.
AMENITIES + ENTERTAINMENT
NOTEWORTHY EVENTS
The three week event is held at 40 venues across Tucson, bringing in
$120M to economy annually
Annually, 9,000 cyclistscomplete the 106-mile trek around the
Tucson MSA, Americas largest perimeter cycling event
// 37,000+ ACRES OF DESERT MOUNTAIN
PARKS AND PRESERVES
// SEVERAL URBAN TRAILS HIGHLIGHTED
BY 100+ MILE, CAR-FREE “URBAN LOOP”
// 40+ GOLF COURSES IN GREATER TUCSON
// STONE CANYON IN ORO VALLEY IS A
TOP 200 GOLF COURSE NATIONALLY
RECREATION
SOURCE: VISIT TUCSON, 2015 SOURCE: VISIT TUCSON, 2016
SOURCE: VISIT TUCSON, MPF RESEARCH 2016 SOURCE: GOLF DIGEST, 2016
GEM, MINERAL, & FOSSIL SHOW
EL TOUR DE TUCSON
2 6 P I M A C A M I L L A
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ACTIVITY ID ZAA0190002.
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NON-ENDORSEMENT NOTICE
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E XCLUSIVELY LISTED BY
Marcus & Millichap | One South Church, Suite 1262 | Tucson, Arizona | 85701
HAMID PANAHIFirst Vice President [email protected]: AZ SA550601000
JAMES CR AWLE YAssociate520.719.6512 [email protected]: AZ SA659077000
RYAN SARBINOFFBroker of Record602.687.6750 [email protected]: BR675146000
