This industrial, dock and grade incubator business park closed May 29, 2020. The building was 100% leased at the time of the sale.
Most of the tenants in this building were small bay distribution related.
Despite the massive economic effects from the virus, the Tucson industrial market continues to stay strong. The vacancy rate is 6.1% and we expect that rate to remain around 6-6.5% over the next year. As of May, 16, in Arizona alone, 72,523 PPP loans were approved, totaling over $8.6 Billion dollars. Not sure of the amount received in Tucson but this significant amount of money has provided a backstop or life line to a lot of small business in Tucson. This is a reason why there has not been much change to the occupancy rate in Tucson to date. We also expect small bay industrial to remain strong as most tenants are considered “essential”, commodity driven and not affected by closures. Small bay industrial spaces less than 10,000 SF are 95% filled with lease rates increasing 10-20% over the past two years. Larger bay industrial spaces have smaller rent increases and are steadily filling up, mostly driven by the building materials market and Ecommerce distribution.
We can attribute this continued industrial market strength to three main economic drivers; distribution, the mining industry, and the housing market.
Max Fisher, Industrial Properties Broker