• Industrial demand bounces back, supports healthy rent growth
  • 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
    years.
  • 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.