The Tucson Commercial Real Estate Market

Shanti Ryle

August 7, 2025

Architecturally fun buildings in Tucson, Arizona

Key Takeaways

Tucson’s location near the U.S.-Mexico border and major Western markets strengthens its role in logistics, trade, and manufacturing.
Steady population growth of over 1 million residents supports sustainable CRE development without overbuilding.
The industrial sector remains active with 52M+ SF of inventory and strong small-bay demand despite slightly higher vacancies.
Office vacancies are lower than national averages, with healthcare-related submarkets driving leasing activity.
Retail vacancy remains low, supported by essential and service-oriented tenants and ongoing redevelopment.

Tucson, Arizona proudly stands as one of the Southwest’s most dynamic markets for commercial real estate activity. As the state’s second-largest city, Tucson offers a diverse mix of property types and development opportunities, supported by steady population growth and a strong employment base. From downtown redevelopment to suburban expansion, the region is attracting attention from investors, tenants, and developers alike.

Crexi proudly supports CRE professionals across Tucson, Marana, Oro Valley, Vail, Casas Adobes, and greater Pima County with the industry’s most intuitive transaction tools. Our platform streamlines the entire deal lifecycle, from marketing and lead generation to closing, helping brokers connect with serious buyers and tenants faster.

To date, Crexi has powered more than $540 billion in commercial real estate transactions and hosted over $5 trillion in property listings. Whether you’re seeking your next investment or marketing a standout asset, Crexi is your partner in navigating the Tucson CRE landscape.

The sun glints off a tall office building in Tucson

The State of Commercial Real Estate in Tucson

Tucson boasts an exceptional combination of economic opportunity, cultural diversity, and natural beauty, all of which support a steadily growing commercial real estate market. Its location in southern Arizona, close to the U.S.-Mexico border and major Western markets, makes it a strategic hub for logistics, trade, and advanced manufacturing. Anchored by institutions like the University of Arizona and Davis-Monthan Air Force Base, the city benefits from a stable employment base and ongoing investment in education, defense, and innovation.

Beyond its economic drivers, Tucson’s appeal is strengthened by a high quality of life, affordable cost of living, and access to world-class outdoor recreation. A strong sense of community, rich heritage, and growing infrastructure make the region an attractive destination for businesses and residents alike.

As Tucson evolves, its commercial real estate landscape reflects both its exciting momentum and long-term growth potential.

Tucson Regional Breakdown

While Tucson’s population growth may trail behind faster-growing Arizona metros, its steady pace reflects a more sustainable trajectory. The region continues to attract new residents with its affordability, livability, and strong community ties, all without the strain of rapid overdevelopment. As the metro area evolves, Tucson proves its capability for long-term resilience and balanced commercial real estate opportunities.

The Tucson MSA is home to more than 1 million and nearly 550,000 in the city limits.
Since 2010, Tucson’s population has been on the rise, according to MAP.
Central suburbs of Tucson include Oro Valley, Marana, Sahuarita, and South Tucson.
The cost of living is lower than the US average and the average for Arizona.
The median age is 35.6, about 10% lower than the figure for the state and the country.
Per capita income in the Tucson MTA is $39,723, and median household income is $69,758, both statistics about 10% less than the average in the US.

The outside of the Ace Hotel in Tucson with its lit up marquee

Tucson Job Market

Tucson’s job market reflects the strength of a region built on innovation, education, and global connectivity. While recent years have brought a slower pace of growth, the foundation remains solid, supported by key industries like aerospace, healthcare, and logistics. With a well-educated workforce and strategic location near major trade corridors, Tucson is expected to renew its economic momentum in the years ahead.

GDP for Tucson is $62.1 billion, up from $38.2 billion in 2015.
The unemployment rate is down to 4.6% as of June 2025, according to the US Bureau of Labor Statistics (BLS).
Although both Tucson and the neighboring Phoenix metro area have seen slowed job growth in recent years, experts expect the job market to improve in 2026 and beyond.
The proximity to Southern California and Mexico attracts numerous businesses and industries, serving as a crucial hub for international trade and commerce.
Major industries in Tucson include education and health services, professional and businesses services, government, and trade, transportation, and utilities.
Tucson’s major employers include the University of Arizona, Honeywell Aerospace, Northrop Grumman, Amazon, Caterpillar, MST Global, and Arizona Community Physicians.
Tucson is considered a major player in research, development, and manufacturing within the sectors of aerospace and defense, renewable energy, natural resources, and photonics and optics.
Nearly 37% of metro area residents hold a bachelor’s degree or an advanced degree.
The region’s transportation infrastructure includes Tucson International Airport (TUS) and major interstates like I-10 and I-19, providing significant connectivity for residents and businesses. Cities within a one-day drive include Phoenix, Las Vegas, San Diego, and Los Angeles.

The Arizona State University Wildcats field in Tucson

Tucson Industrial Market

Tucson’s industrial market is equal parts active and evolving, with continued construction signaling long-term confidence despite near-term shifts in absorption. While vacancy has ticked up slightly, demand for smaller bays remains strong, and several speculative projects are set to deliver in key submarkets by year-end. Cost pressures and higher interest rates are causing a level of investor caution, but core submarkets continue to draw steady tenant interest.

Market overview (Cushman & Wakefield Q2 2025)

Inventory: 52,050,529 SF
Vacancy rate: 5.7%
Absorption: -102,600 SF (YTD)
Key leases by tenant: Alorica Inc. (101,436 SF), Energy Logistics Inc. (34,680 SF), Sundt Construction (32,681 SF)
Under construction: 533,044 SF
Largest submarkets: SW Tucson/Airport, Northwest Tucson/Oro Valley, Southeast Tucson

Crexi Insights

These are the most recent industrial lease and sales trends from Crexi Insights (as of August 2025):

For Lease (active)

Asking rate/SqFt (median): $12 per year
Median SqFt/listing: 6,822
Days on market: 229
Total listings on Crexi: 218 spaces

For Sale (active)

Median asking price: $1.3 million
Price/SqFt: $120
Asking cap rate: 3%
Days on market: 196
Total listings on Crexi: 59

Sales Comps (past 12 months)

Median sold price: $820,000
Sold price/SqFt: $118
Total sales volume: $72.6 million
Median SqFt sold/transaction: 4,430
Total SqFt sold: 1.4 million
Days on market (median): 370

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An older, mission-style architectural building in Tucson

Tucson Office Market

The Tucson office market continues to adapt to shifting demand, with vacancy rates trending upward but still faring better than national averages. Activity is strongest in healthcare-adjacent submarkets, where medical and behavioral health tenants are driving leasing momentum. While new construction remains paused, steady demand for small suites and strategic leasing in high-demand pockets keep the market moving.

Market overview (Cushman & Wakefield Q2 2025)

Inventory: 29,006,352 SF
Vacancy rate: 10.4%
Absorption: -106,074 SF (YTD)
Key leases by tenant: Undisclosed tenant (27,787 SF), Spoke Coworking Tower Suites, LLC (13,328 SF), Tucson Orthopaedic Institute (10,222 SF)
Under construction: 0 SF
Largest submarkets: Central, North/Oro Valley, Southwest

Crexi Insights

Obtaining real-time data on the Tucson office market is made possible by Crexi Insights. As of August 2025, here are the most recent trends in Tucson office leasing and sales:

For Lease (active)

Asking rate/SqFt (median): $20 per year
Median SqFt/listing: 1,648 SF
Days on market: 252
Total listings on Crexi: 664 spaces

For Sale (active)

Median asking price: $875,300
Price/SqFt: $185
Asking cap rate: 6.7%
Days on market: 215
Total listings on Crexi: 126

Sales Comps (past 12 months)

Median sold price: $407,000
Sold price/SqFt: $165
Total sales volume: $77.3 million
Sold cap rate: 4.1%
Median SqFt sold/transaction: 2,622 SF
Days on market (median): 146

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Downtown Tucson, AZ as seen from the desert

Tucson Retail Market

Tucson’s retail landscape continues to show steady activity, even as some segments shift with changing consumer habits. Demand is staying especially strong in sectors like food service, auto-related businesses, and resale, helping to keep vacancy rates in check across key corridors. With new developments in the pipeline and continued interest in redeveloping well-located sites, the market reflects a healthy balance of stability and evolution.

Market overview (Cushman & Wakefield Q2 2025)

Inventory: 56,844,655 SF
Vacancy rate: 5.3%
Absorption: -48,322 SF (YTD)
Key lease transactions by tenant: Just Between Friends Tucson (33,630 SF), Savers (33,355 SF), ArchWell Health (13,905 SF)
Under construction: 225,313 SF
Largest submarkets: East, Central West, Central West, South

Crexi Insights

Tucson retail lease and sales trends from Crexi Insights (as of August 2025):

For Lease (active)

Asking rate/SqFt (median): $16 per year
Median SqFt/listing: 2,040 SF
Days on market: 407
Total listings on Crexi: 567 spaces

For Sale (active)

Median asking price: $1.4 million
Price/SqFt: $227
Asking cap rate: 6%
Days on market: 146
Total listings on Crexi: 106

Sales Comps (past 12 months)

Median sold price: $725,000
Sold price/SqFt: $170
Total sales volume: $176.5 million
Sold cap rate: 6.1%
Median SqFt sold/transaction: 3,800 SF
Days on market (median): 131

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An overhead photo of suburban residential properties in Tucson

Tucson Multifamily Market

The multifamily market in Tucson continues to adjust in response to shifting renter demand and cautious investor sentiment. While some performance indicators have softened year over year, overall market activity remains steady, with select submarkets showing encouraging signs. Investor interest is still strong for well-positioned assets, particularly those offering value-add or seller-financed opportunities.