Metro Tucson’s industrial and logistics market’s healthy activity in Q4 2018 resulted in 93,604 sq. ft. of net absorption. Year-to-date net absorption totaled
830,133 sq. ft., significantly ahead of the 13,834 sq. ft. from 2017.
On the supply side, 1,102,000 sq. ft. are currently under construction throughout metro Tucson. New construction has been limited to build-to-suit
(BTS) projects with exception of a single speculative development.
Metro Tucson’s occupancy gains totaled 93,604 sq. ft. during Q4 2018, which marked the sixth consecutive quarter of positive net absorption.
Market-wide vacancy fell to 7.5% in Q4 2018, a 60-bps decrease year over year. Demand for quality space with substantial floor plates and clear heights have been the driver behind the drop in vacancy over the past several
Tucson’s average asking lease rate increased 4.0% over the last 12 months to $0.52 per sq. ft. NNN in Q4 2018 and 8.3% from the previous quarter.
Healthy employment gains and strong consumer sentiment are supplementing Tucson’s industrial and logistics fundamentals. In November, Tucson
employment rose 2.3% annually, which brought the unemployment rate down to 4.1%.1 Job gains are fueling demand for industrial space marketwide.