How Payson’s economic recovery will impact commercial real estate tenants.
As the town of Payson, state of Arizona and our nation pull out of the great recession and experience economic recovery, The era of retail tenants ruling the leasing market appears to have passed according to many retail real estate brokers.
Nationally it is certainly become a landlord’s market, concessions are definitely down this year and when it comes to renewals, more retailers are moving away from the trend over the past few years of signing for the short-term only (three to five years) and are more likely to renew for seven to 10 years, which is more in line with historical norms.
While there is currently ample inventory of retail space in Payson, we have to wonder how long that inventory will last since retail construction has been extremely little in the past few years.
Sales tax, Payson’s most important revenue source jumped about 15 percent compared to the same period last year, which outperformed the Arizona statewide figure of Sales taxes collected statewide and shared based on population rose 6 percent for the fiscal year.
As I have mentioned in previous post, Payson is making progress in becoming a destination point rather than just a pass-through area on the way to the cooler temperatures of the rim country, as it has been in years past.
Local businesses have for years longed for events within the town of Payson that would bring in tourism dollars from outside the area.
Success is evident, as a breakdown of the Payson sales tax figures by category showed hotel bookings showed a strong gain up 77 percent over the same period last year. Most other categories showed modest gains.
I think we all understand what will happen if these increases continue and commercial inventory continues to shrink. What none of us know is exactly when.
Let me know how I can help you with your commercial properties.
This information is for informational purpose and not intended to be investment advice, and should be explained to you in detail. You should always feel free to consult an attorney and/or tax adviser to obtain further information you deem necessary. I want you to be prepared.