To read the full report on Tucson’s Industrial market activity in Q1, click here
Tucson’s industrial market remained active in Q1 2026, with vacancy modestly rising to 8.0% amid absorption of recently delivered space. When excluding 15 vacant buildings over 100,000 sf that do not demise to smaller space, the vacancy falls a little short of 2.5%, highlighting tight availability in smaller spaces despite a lack of activity amid heightened geopolitical risk and rising oil prices. Overall demand continued to be driven by logistics, distribution, and service users, alongside a resurgence of mining-related tenants.
The Airport and Northwest submarkets remained the most active, benefiting from established infrastructure and proximity to transportation corridors. Leasing activity included several notable deals, including Advanced Recovery Technologies – Arcadia, LLC’s 60,000 sf lease at 6978 East Century Park Drive and Citizens Transfer & Storage Co., Inc.’s 51,786 sf short-term lease at 6701 South Midvale Park Road. Construction activity was limited after the completion of four major projects at the end of 2025, as a lack of leases and rising material and labor costs continued to constrain speculative development.
Lease rates held firm, buoyed by limited availability and strong demand in functional, well-located buildings. Landlords selectively raised rents, particularly for smaller spaces, while terms generally ranged three to seven years. Investment activity slowed, with limited availability amid economic and geopolitical uncertainty, though strong buyer interest persisted for well-positioned assets.
The quarter’s top sale included 10070 W Clark Farms Boulevard, a 435,023 sf industrial building purchased by ElmTree Funds. Smaller buildings with yard space remained highly attractive, and ongoing scarcity in key submarkets continued to underpin steady pricing and support the broader market.
