To read the full report on Tucson’s Retail market activity in Q2, click here
In Q2 2026, Tucson’s retail market remained healthy, with vacancy holding at approximately 5.3% as tenant demand continued to support stable occupancy. Asking rents increased 5.9% year over year, reflecting continued strength despite a more measured pace of leasing activity.
Demand continued to be driven by fitness, experiential retail, and discount retailers. East Tucson led the market in absorption, supported by activity at Park Place and surrounding centers. A notable lease during the quarter was Teso Life’s 18,000 square foot (sf) commitment at 455-625 E. Wetmore Road, marking the retailer’s second Arizona location and the final junior anchor space at the center.
Construction activity remained focused on strategic projects, highlighted by the completed 100,974 sf Bass Pro Shops at Tucson Marketplace. Premium corridors, including the Foothills and Oro Valley, continued to attract retailers and maintain strong leasing fundamentals.
Average asking rents reached $18.32 per square foot, remaining below the national average while continuing to outpace national rent growth. Market conditions remained balanced, with premium corridors commanding the highest rents and pricing remaining stable across most retail formats.
Investment activity remained strong for grocery-anchored and single-tenant retail properties. Notable transactions included Phillips Edison & Company’s $53.9 million acquisition of Oracle Crossings, along with Interstate Realty Advisors’ acquisitions of Shoppes at Bears Path for $7.7 million, and Desert Square for $7.95 million, reflecting continued demand for both stabilized and value-add assets. Owner-user sales were dominated by Gee Automotive’s approximately $211 million acquisition of the Jim Click dealership portfolio, which accounted for about two-thirds of year-to-date sales volume and pushed trailing 12-month volume well above historical averages. Excluding this transaction, sales activity remained near typical levels, with private buyers continuing to favor stable single-tenant net lease properties.
