Vacancy rates for Tucson’s available industrial space continues to drop, approaching 3.5%, representing just 1,578,300 square feet (sf). Vacancy rates this low mean that much of the available inventory is in older buildings which llack modern features or would require extensive renovation to meet the needs of many prospective tenants.
Rising construction costs continue to be the biggest negative influence to growth. Anecdotal evidence indicates that this may be a bigger concern for local businesses than for national firms seeking to establish or expand their presence in the Tucson market.
Sales prices per square feet (psf) have increased consistently each quarter, now at $116.00 psf Q2 (a 9% YOY increase). Lease rates in the northwest continue to climb with some multi-tenant spaces getting $1.00 psf.