This is Part 1 to the Industrial Then & Now Series. If you want to see the upcoming posts add your email address under the contact section of industrialtucson.com

Old photos either came from the Pima County Assesor's website or friends and family

Put together by Max Fisher, Industrial Real Estate Broker with Cushman & Wakefield | PICOR

$790,000
​Northwest Tucson
Fenced yard
Sprinkled
20% Office / 80% Warehouse
37,026 SF (0.85 Acres)
AC Office / EVAP Warehouse

Listed by Max Fisher of Cushman & Wakfefield | PICOR

Two recent mid sized industrial transactions were recently completed, 2200 E Benson Highway (5,760 SF) and 1050 E 19th St (14,010 SF). Both of them were solar related. Both transactions were expansions, effectively doubling in size. 

The Tucson solar market seems to continue to grow and prosper. In addition to solar install growth, Solar Research & Development continues to grow throughout Tucson. With 286 days of sun in Tucson, the solar industry is very appealing. 

As the virus continues to damage the economy, the housing market seems to feel little effects, including housing improvements like solar and remodels. There continues to be multiple offers on listings and renters are having trouble finding housing, especially affordable housing. This high demand, low supply scenario creates a perfect storm for housing developers. This increased development directly benefits the industrial market as the developers need warehouses and industrial yards to store building materials. There is also a huge demand for trades related businesses that serve the housing market like solar, plumbing, electrical, and HVAC. Those trades related businesses typically occupy small to mid-sized industrial property. 
 

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.
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We can attribute this continued industrial market strength to three main economic drivers; distribution, the mining industry, and the housing market.