The Tucson Commercial Real Estate Market

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Tucson, Arizona, represents a fast-growing metropolitan with ample commercial real estate investment options for principals and searching tenants alike.

As the state’s second-largest city, Tucson plays host to a sizable inventory of land and other commercial property. The city’s fast-growing population and employment rate point to promising opportunities for investors considering Tucson property for sale. Crexi aids property seekers with the straightforward technology tools they need to find the best Tucson commercial real estate for their unique needs.

Additionally, Tucson commercial brokers harness Crexi’s robust lead management software and marketing tools to maximize their business and effectively engage with buyers and tenants nationwide. Using Crexi’s broker tools suite, commercial agents in Tucson save time, connect with more leads, and close on more listings.

At this time of writing, Crexi’s digital marketplace has facilitated over $330 billion in CRE transactions and showcased listings totaling over $2 trillion in property value.

Crexi proudly serves Tucson, Casas Adobes, Vail, Marana, Oro Valley, and Pima County in its entirety as the MSA’s fastest-growing digital CRE platform.

Downtown Tucson's commericial real estate district

The State of Tucson Commercial Real Estate 

Although home is just over one million residents, the Tucson commercial real estate market offers everything real estate investors are looking for. Vacancy rates are declining among all asset classes, rents are rising, and investor activity is solid and steady.

Tucson is located in Southern Arizona, about 100 miles southeast of Phoenix and 60 miles north of the U.S.-Mexico border. Major employers in the metropolitan area include the University of Arizona (U of A), Davis-Monthan Air Force Base, and state and local governments.

The city is also among the fastest-growing innovative business centers in the country. Life science programs and scientific research, defense and space-related manufacturing and development have attracted both start-ups and multinational companies.

Downtown Tucson at night, in front of the AC Hotel

Tucson Regional Breakdown

According to the most recent census, the population of Pima County, where Tucson is located, grew by more than 6.4% over the past 10 years. During the same period, the city added 22,500 residents and accounted for more than half of the metropolitan area population:

  • Tucson is home to over 542,000 in the city and more than one million in the metropolitan area.
  • Metropolitan Tucson includes Oro Valley, Marana, and Sahuarita.
  • Over the past ten years, the population of Tucson grew by 4.3%, while Pima County’s population increased by 6.4%.
  • Tucson is the second-most populous city in the state and the 58th most populous metropolitan area in the country.
  • Median age in Tucson is 38.7, about the same figure in Arizona and the U.S.
  • Nearly 40% of the population of the Tucson metropolitan area is between the ages of 20 and 49.
  • Tucson’s per capita income is $30,747, and the median household income is $55,023.
University of Arizona in Tucson football field during a game

Tucson Job Market

Non-farm employment in the Tucson MSA is nearly 392,000 and has increased by 2.9% over the past year. Over the next three years, employment is projected to grow by an average of 2% per year with an average annual population growth of 1%:

  • GDP for the Tucson MSA is nearly $45.2 billion and has grown by more than 30% since 2010.
  • Unemployment rate in Tucson is 2.8% as of March 2022.
  • Employment sectors with the fastest growth include trade and transportation, mining and logging, information services, and leisure and hospitality.
  • Target growth industries in Tucson include aerospace and defense, optics and optics sciences, solar energy, tourism, and hospitality.
  • Tucson’s top employers are the University of Arizona, Raytheon Technologies, State of Arizona, Davis-Monthan Air Force Base, Pima County, Banner University Medical Center Tucson, and U.S. Customs and Border Protection.
  • University of Tucson, along with Davis-Monthan AFB and the U.S. Army Intelligence Center in nearby Fort Huachuca, is spurring the development of high-tech industries and employment.
  • Tucson is the closest major city to the Mexican state of Senora, which is becoming an important hub for aerospace businesses.
  • Nearly 90% of the residents of Tucson are high school graduates, while almost 34% hold a bachelor’s degree or an advanced degree.

Tucson’s transportation infrastructure includes Union Pacific freight rail service linking the city to ports in Los Angeles and the Southern United States, five interstates and state highways, and Tucson International Airport, the second-largest commercial airport in the state.

A historic landmark in Tucson, Arizona

Tucson Industrial Market

Lease rates for industrial space in Tucson increased by more than 21% last year, due to tight vacancy rates and lack of available product and deliveries. Significant developments include 220,000 SF of build-to-suit space for Amazon and planned projects for Southwest Gas and medical device company Becton Dickinson:

  • Total industrial inventory: 39,494,153 SF
  • Average asking rent: $0.68/SF per month, NNN
  • Vacancy rate: 5.4%
  • Absorption: 152,714 in Q1 2022
  • Key lease transactions by tenant: Solar Industries 30,000 SF, Motion Industries 23,500
  • New construction: 0 SF completed in Q1 2022 with 365,545 SF currently under construction
  • Investment sales trends: $24 million in Q1 2022, median sales price $97/SF, market cap rate 8.0%
  • Largest industrial submarkets: Northwest/Oro Valley, Southwest/Airport, Southeast, Palo Verde

Learn more about Tucson industrial space for lease.

Tucson Office Market

Increasing in-migration and a strong job market are driving the demand for office properties in Tucson from tenants and investors alike. Asking rents are growing year over year, vacancy rates are declining, and investment sales continue to be strong:

  • Total office inventory: 26,628,372 SF
  • Average asking rents: $21.80/SF per year, full service gross
  • Vacancy rate: 8.6%
  • Absorption: 324,000 through Q1 2022
  • Key leases by tenant: Brookline College 31,100 SF, University of Arizona 30,000 SF, Banner Health 15,000 SF, Nova Financial Holdings 7,500 SF
  • New construction: 193,000 SF currently under construction
  • Investment sales trends: $25 million in acquisitions in Q1 2022, sales price $155/SF, market cap rate 8.6%
  • Largest office submarkets: Central, Downtown, North/Oro Valley, Southwest

Learn more about Tucson office space for lease. 

A few from the hills of downtown Tucson, Arizona and its skyscrapers

Tucson Retail Market

A recovering economy, rising household incomes, and pent-up demand are helping the retail market in Tucson. Average lease rates for Tucson retail space are steadily increasing, while vacancy rates are the lowest they’ve been since the pandemic began:

  • Total retail inventory: 56,691,788 SF
  • Average asking rent: $15.14/SF per year, NNN
  • Vacancy rate: 8.0%
  • Absorption: -18 SF in Q1 2022
  • Key leases by tenant: Fry’s Food & Drug Stores 11,600 SF, Tucson Auto Body Parts 7,500 SF, Fox Restaurant Concepts 7,100 SF, Eyemart Express 6,300 SF
  • New construction: 167,272 SF currently under construction
  • Investment sales trends: $134 million in Q1 2022, transaction sales price $154/SF, market cap rate 7.2%
  • Largest retail submarkets: East, Central East, Central West, South
  • Median household income: $55,023, with 55% of households earning more than $50K per year

Learn more about Tucson retail space for lease.

Tucson Multifamily Market

Rapidly rising home prices in Tucson are increasing the demand for multifamily rental property in Tucson. Apartment rents in the metropolitan area are still relatively affordable as of 2022. Investors are attracted by the lower per-unit sale price and higher cap rates for Tucson multifamily property compared to ultra-competitive markets in California and Texas:

  • Total housing units: 463,236
  • Renter occupied: 36%
  • Multifamily inventory: 73,292 units
  • Average effective asking rent: $1,126
  • Rent growth: 18.83% year-over-year
  • Vacancy rate: 4.9%
  • Investment sales trends: $377 million in Q1 2022, median sales price per unit $153,029, 5.0% average cap rate
  • Median household income: $55,023
  • Per capita income: $30,747

Learn more about Tucson multifamily property for sale.

An overhead drone view of Tucson single family rentals

How Crexi Connects Buyers and Tenants to Tucson Commercial Real Estate

Crexi’s simplified search tools provide principals and tenants an easy, efficient way to explore commercial property in Tucson. 

Property seekers use Crexi’s main search feature to browse plentiful Tucson space for lease or sale within clicks. Users can refine their search by dozens of parameters, such as asset or property type, price or rate per square foot, amenities, size, or neighborhood. 

Upon discovery, buyers and tenants can reach out to their ideal property’s broker within seconds. Users can also download the property flyer, request more information, and even submit their letter of intent (LOI) through Crexi’s secure marketplace.

Intelligence Equips Investors with Data and Market Knowledge 

Commercial real estate investing requires sizable investments in research and market knowledge. Crexi Intelligence aggregates the most up-to-date market trends into one easy-to-use data library. With Intelligence, investors and tenants interested in Tucson enjoy access to over 13 million sales comparables, 40 million property records, and detailed analytical insights on each property page.

Property seekers use Intelligence’s robust data library to make the most informed investment choices possible when exploring Tucson real estate listings.

Intelligence is available to buyers, sellers, and tenants on a subscription basis.

A sunset view of buildings in downtown Tucson

How Tucson Brokers Thrive with Crexi

Tucson brokers market nearly 1500 properties for sale and spaces for rent on Crexi within the city’s boundaries. As more businesses eye Arizona’s tax-friendly policies and growing population, Tucson offers a promising commercial real estate market with advantageous cap rates and investment opportunities. 

Commercial agents in Tucson harness Crexi’s broker tools suite to quickly list properties to a sizable database of property seekers. The broker dashboard allows brokers real-time insights into buyer and tenant lead behavior, allowing them to connect with the highest value contacts in seconds.

Commercial brokers in Tucson can easily market listings across property types, such as:

  • Retail properties
  • Land parcels
  • Mixed-Use buildings
  • Offices
  • Multifamily developments
  • Industrial buildings
  • Hospitality assets
  • Non-traditional properties such as data centers, self-storage, etc.

Using Crexi’s robust tech tools, Tucson commercial brokers have everything they need to guide their listings from the initial list to contract. Tucson agents can even house all due diligence paperwork in Crexi’s secure file storage.

While Crexi’s free broker tools are expansive, the true power of Crexi emerges with Sale PRO, Lease PRO, and All PRO

Crexi PRO Dashboard 2020

Crexi’s All PRO Membership

Tucson commercial real estate professionals use Crexi PRO to build out deal pipelines and close on listings faster. 

The PRO offerings include highly detailed lead contact information and aggregation, helping brokers manage their leads and connect with the most promising tenants and buyers. 

Tucson CRE brokers also use PRO to reduce collaborative friction, thanks to Crexi’s simplified and branded lead reports. PRO listings also receive preferred placement at the top of search aggregate pages, winning higher visibility on the properties.

Crexi’s marketplace also sends emails to hundreds of thousands of active property searchers each week. These emails use machine learning and AI to customize a selection of highly relevant properties based on each user’s buyer behavior. Thanks to this extreme customization, PRO listings receive a 10-15% higher click-through rate than industry averages.

Nighttime view of Downtown Tucson, with  neon lights and moving vehicles in the foreground

PRO users also receive access to Crexi Intelligence, allowing them to improve their market insights and provide more value to their clients. 

In Tucson, brokers with Crexi PRO memberships can easily engage with over 100k leads searching in Tucson in the last two years. Not to mention the more than 12.5 million leads nationwide who searched using Crexi in 2021.

Crexi PRO users, on average, connect with 125% more leads and close six-to-eight times more contracts than non-PRO subscribers. 

Ready to make the switch? Learn about PRO here.

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Shanti Ryle
Shanti Ryle

Content Marketing Manager

Shanti leads Crexi's content marketing strategies with 7+ years of content development experience, creating everything from blog posts to award-winning podcasts. Previously, she worked on content teams at Snapchat, Weedmaps, and HopSkipDrive as well as developed copy, articles, and media for freelance publications.

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