As we entered the second quarter of 2015, key drivers for the Tucson industrial market included logistics and call centers, with the mining industry preparing for the next wave.
Tucson’s unemployment rate dropped 0.3 percentage point to 5.6% in February, considered close to full employment. That being said, the slow pace of job growth remained of primary concern and impeded stronger market progress.
Positive net absorption of 255,000 square feet (sf) marketwide during the first quarter improved overall vacancy one-half percentage point from 10.7% at year-end to 10.2%. This represents the third consecutive positive quarter. While up 3.0% year-over-year, the Tucson economy has not regained enough traction to improve effective rates measurably. Activity and lease interest remained fair, with the most activity under 10,000 sf.