Employment in Tucson: Fun Again! ~ TREND Report

Finally. It’s getting brisk! Not just fall in the air (or the closest it comes in the Sonoran Desert), but a sense that Tucson has truly turned the corner. It’s a time when economic momentum is palpable, and good news comes in long jump strides—not in the inches of years past. We can stop pinching ourselves for a moment and celebrate this, relish it, then build on it. We deserve to bask in some abundant sunshine.

Sentiments, statements, and actions are telling. Both the private and public sectors have their oars in the water, and in large part, they are paddling in unison. It begins with job creation followed by meaningful wage growth. Consumer confidence spurs retail spending, providing revenues in support of infrastructure and education, thereby promoting community well-being and pride.

If you missed the fanfare, Tucson was recently named the third fastest-growing metro area over 500,000 population by Bloomberg, ahead of the likes of Austin and Seattle. Tucson’s year-over-year job growth was 4.2% in July 2016. Measures like this are retrospective, and the jobs announced in recent months have yet to be filled. Thus, the outlook is truly bright.

From C’s to T’s: The Tide has Turned

150 years ago, one in four Arizonans worked in mining. At that time, the “Five C’s” dominated the economy:  Copper, cotton, cattle, citrus and climate. Tucson’s mayor, Jonathan Rothschild, reframed the economic engines for a new era, introducing the “Five T’s:” Technology, trade, transportation, tourism and teaching. So what is behind the increased momentum and vibrancy in our community?

Key Drivers

  • On the map. Tucson is getting attention for all the right reasons, on the heels of recognition as a top city for millennials. Our food scene has garnered exposure from the New York Times, USA Today, and others after being named the country’s first and only UNESCO City of Gastronomy. Three of our public/charter schools were ranked in the top 25 nationally by U.S. News & World Reports.
  • National housing recovery. In-migration can happen again, as fewer homeowners are ‘upside down’ in areas such as the Midwest and California, historically places from which the highest numbers relocate to Arizona. Shrinking inventory is driving up home prices around the nation, which may also spur construction. Arizona was the only state in the United States to experience month-over-month construction job gains in July 2016, and was one of three states to see year-over-year growth.
  • California business “exodus.” California has long been the leading source of newcomers to our region, both individually and corporately. A combination of aggressive marketing to companies in California and positive business conditions in Arizona has paved the way for new companies to relocate to our state.
  • Community investment. Tower cranes. An endangered species on the skyline for many years, now these birds can be seen in downtown Tucson and beyond. Tucson Medical Center’s southeast Rincon Health Campus will open late in 2016; Banner UMC’s $500 million hospital expansionis underway; slated to open May 2017, AC Hotel by Marriottis the first downtown Tucson hotel constructed since 1972; and 1 West Broadway, Caylor/Wadlund’s second downtown mixed-use development, takes occupancy this fall.
  • Regional assets. UA Tech Park, Port of Tucson, Innovation Park, the Tucson Modern Streetcar, military installations, our research university, Tucson International Airport’s expanded service, and that ever-present sunshine. Tucson can build on successful industry clusters, from aerospace with Raytheon as our cornerstone, to logistics with the likes of new and expanded operations for FedEx Ground, HomeGoods, Old Dominion and more.

Good News Keeps Coming

Last year’s major announcements are the employers of today. Take HomeGoods, projected to grow from 400 to 900 workers, and the Comcast Center of Excellence, with employment projections of 1,100 or more Tucsonans, including 15% military reservists, veterans and their partners. But what has been announced more recently?  See several listed below, and visit the Sun Corridor Inc. website for a comprehensive listing, including projected economic impact.

  • ADP – A Fortune 500 name in our midst, will hire 450 employees in Tucson with a $485M economic impact.
  • Caterpillar – Relocating its Surface Mining and Technology Division to Tucson with an expected 635 high wage jobs; $1.9 billion economic impact over 10 years. (See detailed article).
  • C3 – Southern Arizona’s fastest growing employer last year announced plans to increase hiring by 1,132 locally.
  • Tucson Medical Center – 61 new hires in local expansion
  • Samsung SmartThings – 2012 tech start-up with Tucson ties acquired by Samsung, plans to grow downtown to 80 employees
  • WorldView – 448 new high-wage jobs, with average $47,000 salary and $40M capital expenditure.

The combined estimated economic impact of those firms listed above totals over $3 billion. Major employer announcements make headlines with good reason. Meanwhile, expansions by office and industrial-space using employers often either do not, or cannot, make the news. Tucson’s existing businesses, both large and small, have been quietly gaining health and traction and have arguably accounted for the Tucson region’s path to vibrancy over 24 months.  A significant private aerospace employer, for instance, has shifted from reducing space and headcount to a more positive hiring and occupancy trend.Tucson_Office_Vacancy-1.jpg


As a result of this steady, organic recovery and job growth locally, surplus and sublease office space in the Tucson market has largely shaken out. Overall market vacancy hovered around 12.0% for six solid years. At its current 11.5%, Tucson office vacancy has touched its lowest point since Q4 2009. Note that a share of that space is functionally obsolete. Our data reveals a strong differential between older and newer buildings, with those built prior to the new millennium sitting at 13.9%, and those built since 2000 enjoying a much healthier 6.0% vacancy.

Pollyanna Signs Off

Our community’s patience and resilience now have a payback. Greater Tucson has always been a great place to live and play, and it has often been a great place to work. I have been accused of irrepressible optimism in times past, but today’s measurable, meaningful job growth in Tucson tells its own story. May the fun continue, developing prosperity and quality of life for all in the region.

Sources: Sun Corridor, CoStar Group, City of Tucson, RE-Daily News, Arizona Daily Star, Bloomberg

Barbi Reuter, RPA is COO/Principal with Cushman & Wakefield | PICOR, Tucson’s “Best Place to Work” 2016. She writes and speaks on commercial real estate and social media marketing and is passionate about creating opportunities in our vibrant community and industry. Barbi is dedicated to local and national board service for civic, charitable, and industry organizations. Named a 2015 Woman of Influence by Real Estate Forum Magazine, you can reach her by phone (520.546.2744), email ([email protected]), LinkedIn (https://www.linkedin.com/in/barbireuter ) or Twitter (@BarbiReuter).


Copyright TREND Report. For more information on TREND Report, visit http://trendreportaz.com/ or contact Publisher, Lucinda Smedley.

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