January 2003

Partners Management & Consultants, Inc. celebrated its 15th Anniversary on November 1, 2002. It is hard to believe that so much time has passed since we first opened our doors. I am so appreciative of all the support we have received over the years from our clients, our employees, our tenants and our vendors. Accomplishing our daily tasks could not be done without the tireless effort of so many people and I look forward to the opportunity to continue these relationship and expand our business relationships in the future. Valerie and I have been truly fortunate to have the committed and dedicated professionals that we have working out of our Corporate Office that you interact with on an ongoing basis. Additionally, we have field and site employees who understand that we have to look forward- not backward and dedicate ourselves to advancing and improving our skills and services.

During 2002 we set about to continue our ongoing technology upgrades for the business. Over the years we have always been implementing upgrades to the systems and equipment in this office to allow the improvement of the product we provide. To that end, we set about with the first major software upgrade in several years by the installation of a 32-bit system with our present accounting software. Our intent is to gravitate (as the world seems to being doing) to web-based enterprise and reporting. Although we still have much work to accomplish to that end, the web page this newsletter is published within is the result of many months worth of effort by Valerie Wilson Schuyler RPA, FMA and our staff and consultants to achieve the vision that we have been formulating for many years. Our intent is to be able to use this web enabled technology and the internet to provide both marketing and reporting capabilities to clients and potential tenants and brokers, but also to provide a platform for tenants to find documents and information/newsletters on a password enabled basis. Ours is a service related business and every advancement that allows the benefit of instantaneous and fluid information/communication flow is a step in the further evolvement of both this profession and Partners Management & Consultants, Inc. My goal is not to be part of the group following the person out there leading the way- I want to be the lead dog!! In the coming months you will see further information and capabilities being implemented as part of those plans. We welcome your input and ideas.

Tucson continues to hold its own during these trying economic times. Although leasing activity has been slow or non-existent depending on the specialty type and geographic area- the underpinning strength of our Community and its economic base remains strong. Home building spurred on by low interest rates continues at record or near record levels and has so for the past several years. Apartment construction is minimal due to financing issues and vacancies, but overall occupancy is stronger than many areas of the country. Office markets have been impacted by the immergence and popularity of Office Condominium ownership which several new projects are attracting established and successful professional, medical and general office users. This activity, in turn, is creating vacancies in rental properties that slowed absorption cannot fill. Coupled with sublease space created by national, regional, and local firms, we are seeing increasing overall vacancy percentages, but still the overall market is stronger than most areas of the country. Retail leasing is predicated mostly on new construction in newer areas of the city/county but vacancies have been steady and leasing activity is keeping pace with vacated space coming on the market. We have seen new national retailers moving into the marketplace such as Lowes Home Improvement Centers and expansion by others. The decision to close two K-Marts on Tucson’s northwest and southwest sides, will put approximately 400,000 square feet of “Big Box” space into the marketplace. Industrial leasing has been non-existent and vacancies have been increasing with the closing and relocation of some Tenant/Manufacturers. However, the many bright spots include are the expansion by Raytheon, expansion of the Tucson International Airport, a planned new call center for GEICO employing up to 3000 people, new destination resorts and planned new residential and commercial projects. Tucson continues to grow as new and part time residents decide to be part of the unique charm of the Old Pueblo.

The future for Tucson looks bright. Partners Management & Consultants, Inc. is planning and positioning itself to be part of that bright future. We look forward to working with all of you in the coming months. Happy New Year!!!