Max Fisher, BRD Realty represented three lab transactions totaling 24,000 SF in September. The first, Ninyo & Moore Geotechnical and Engineering purchased an  11,443 SF concrete tilt industrial building at 3970 S Evans Tucson, Arizona for $1,725,000. Time Healy and Abi Robles of CBRE represented the seller, Znarf LLC.

Listings newly listed by Max Fisher, BRD Realty

Torch Props purchased equity in 96,000 SF of light industrial and business park property. Max Fisher, BRD Realty will handle the leasing and Eileen Lewis, Torch Props will now takeover the management.

Oracle Towers and Palmdale Industrial are the two properties that make up 96,000 SF and more than 40 tenants. Most bays have office/warehouse layouts with grade level roll up doors. Oracle Towers also has some office and retail build outs with retail frontage on North Oracle Road.

Tucson's owner occupied market, also known as "user buildings" is as strong as it's ever been. A lack of inventory combined with strong demand from business owner's wanting to own their own real estate has continued to strengthen the industrial/warehouse user market.

With construction costs for industrial above $200 per square foot and very few sub 10 acre industrial parcels available, buyers are still flocking to existing buildings rather than taking the leap and building ground up. Most user buyers are looking for fenced yards in addition to a building to store materials or fleets as they are having difficulty finding buildings with fenced yards for lease.

We are seeing most user buyers pay cash and often seeing buildings on the market for less than a few weeks and often with multiple buyers. Another factor affecting the user market is the re-development of existing buildings such as the new Casino at Grant & I-10 and the new interchange at Country club and I-10. There is more demolition than construction of industrial buildings in 2024. We expect more construction in 2025 but for multi-tenant, for lease industrial buildings with bays more than 10,000-20,000 SF.

The building above was just sold for $1,7250,000 to Ninyo and Moore Engineering. Max Fisher, BRD Realty represented the buyer and Tim Healy, CBRE represented the seller.

Pre-2020, Tucson industrial leasing would slow down in the summer. Leasing remains strong although not like 2021 levels with multiple tenants bidding on the same vacancies. The leasing demand seems to be coming in waves and this summer packs strong demand. In June alone, I closed 9 transactions.

Overall vacancy has increased while the vast, vast majority of vacancy remains in bigger bays. Vacancy below 50,000 SF warehousing remains at all time lows while more industrial product is set to be demolished and re-developed this year than is built. Demand is robust and diverse, ranging from housing market materials suppliers and subcontractors to manufacturing, distribution and lab space. The biggest drivers for Tucson’s economy right now are housing market construction, mining and defense.

We have seen a lull in the manufacturing market as demand seems to be softening as manufacturing jobs also soften. Demand in the Northwest market remains the strongest for bays less than 20,000 SF while demand for bigger bays remains the strongest in the Palo Verde and Tucson Airport sub-markets.
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One interesting new trend that we are noticing is demand or lack of demand related to crime. Vandalism, drug use and burglaries are on the rise and tenants are leaving buildings where they experience crime and are moving to more desirable areas. Historically, some of the areas had little to no crime. Ironically, heavier industrial markets are seeing less crime and more demand from tenants relocating from higher crime areas. 

158 acres zoned heavy industrial next to the Port of Tucson, Amazon and new 200,000 SF+ Becton Dickson. Property includes water rights and engineering plans. 

The land has been subdivided into smaller 1-3 acre lots.
Electric is at the lot line and tests have been conducted for septic. 

This is a great opportunity for an investor to continue with the subdivision and sell off improved lots, develop or build to suit for one large user. Recent sale for a 1.5 acre industrial lot at Valencia/Kolb was $5 per SF. 

Shaded acreage has a recorded development easement so development is limited but can potentially be used as industrial outdoor storage, solar, self storage. Verify with Pima County development services.

Click below to download the brochure

1.13 acre industrial parcel fully fenced and paved in the highly sought after Northwest market now for sale.

-Less than 1 mile to I-10
-Industrial zoning, City of Tucson
-3 phase power
-Extra covered area with two shipping containers included

2023 W Price St Tucson AZ 85705

In most markets throughout the US, industrial vacancy is on the rise but it’s important to understand which part of the market vacancy is rising in. Over the past 5 years during this development boom, the vast majority of industrial was built in the large bay markets, 100,000 SF+ bays. In markets that don’t have excess land to build, for example port markets, not as much product has been built. With markets that can keep expanding into the suburbs, more and more concrete tilt warehousing has been built.

Unfortunately the small-medium bay market has been left out despite massive persisting demand for small-medium bay warehouses. Vacancy for small-medium bay has actually decreased in most markets despite overall vacancy increasing. Lease rates for this mid range warehousing have also increased along with user sale prices.

As vacancy for small-medium bay remains historically low, users buy land and build because why buy an existing warehouse for $180 per square foot when you can build exactly what you need for $200-300 per square foot?

While some markets have increased vacancy, the vast majority of that vacancy is with big bay. The Tucson industrial market as a whole remains under-built and under-supplied.

​April’s CPI and PPI both rose for the second straight month. Currently, 3.5% CPI is above the fed’s target and the markets aren’t pricing in the rate cuts that were expected over the past 6 months. The ten year treasury ended 2023 below 4% and after the last CPI report, the ten year is now above 4.5%. Expect investment sales volumes to remain similar to those of 2023.

Here’s the good news, with inflation on the rise again, we can expect the Tucson industrial market to remain strong and lease rates to continue to increase. 2024 could be the year where we see more industrial buildings get demolished, than delivered. Meanwhile, demand remains strong throughout the industrial market.

The sticky part of inflation for Tucson is with construction. Many developers have put their plans to build on hold, not because of interest rates or lack of tenant demand, but mostly due to the rise in construction costs. Last month a Tucson residential subcontractor who does lots of work for the national homebuilders told me that they just had their biggest month in terms of new unit contracts, almost doubling their March 2023 volume. The subs are still busy and despite industrial construction slowing, construction costs remain elevated mostly due to the increase in residential construction and lack of skilled trades labor.

With most recent projects, I’ve seen construction costs increase for smaller warehouses (30,000 SF and below) and costs come down just a little bit with bigger bay, concrete tilt construction. While materials have come down in pricing, labor costs continue to rise. 

Former manufacturing/fabrication building with a fenced yard for outdoor storage along with 1,200 amp 480V service now available. 

4261 S Country Club

• 1 mile to I-10
• 3 phase power
• 1,200 amp 480V power
• Grade loading
• 12’x15’ roll up door
• 10 roll up doors
• 12 offices
​• CI-2 – County heavy industrial zoning

​Listed by Max Fisher, BRD Realty

Click below to download the PDF brochure

​Max Fisher, BRD Realty, Sam Devouris & David Kimball, NAI Capital represented Piteau, a subsidiary of Tetratech (currently a 10B+ market cap) in the leasing of 13,000 SF at 7051 N Camino Martin. Formerly Bedroxx Bowling, Larsen Baker converted the building to four industrial bays. Piteau leased the Northeast bay. 

This lease is a testament to the strong industrial market, pushing lease rates north of $1.00 NNN. As vacancy continues to decline and lease rates increase, construction should pick up 2024-2025. The former Bedroxx bowling alley conversion is also an Opportunity Zone project. Isaac Figueroa and Elaina Elliott represented the Landlord, Larsen Baker. ​