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Industrial Outdoor Storage: Emerging Powerhouse In CRE

5/6/2025

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In the ever-evolving landscape of commercial real estate, few asset classes have experienced as sharp a rise in demand and valuation as Industrial Outdoor Storage (IOS). Once considered a secondary or niche segment, IOS is now rapidly maturing into a sought-after investment category — drawing interest from institutional capital, logistics providers, and construction firms alike. This growth is driven by a confluence of macroeconomic and microeconomic trends including rising crime, the expansion of e-commerce, increased construction and escalating indoor warehousing lease rates.
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E-commerce and Logistics: Powering Fleet Growth

The meteoric rise of e-commerce has transformed the logistics sector and, by extension, reshaped demand in industrial real estate. One key outcome is the explosive growth of delivery fleets — trucks, trailers, last-mile vans, and support vehicles — all of which need somewhere to park when not on the road. Industrial Outdoor Storage fills this need perfectly.
Proximity to major highways, intermodal hubs, and urban centers makes IOS an ideal base of operations for fleet staging, maintenance, and dispatch. As e-commerce players and third-party logistics providers expand their footprint, IOS lots are increasingly being used as “vehicle yards” — essential extensions of warehouse operations.

Furthermore, IOS provides a flexible, scalable solution. As delivery volumes fluctuate seasonally or in response to promotions, tenants can quickly scale up or down without committing to large-scale warehouse leases. That adaptability is yet another reason IOS is becoming a cornerstone of logistics real estate strategies.

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Rising Lease Rates: Fueling a Shift to Outdoor Storage

The industrial sector has seen record-breaking lease rate increases over the past several years, driven by constrained supply, high land values, and insatiable demand for logistics space. As a result, tenants who traditionally stored goods indoors are reevaluating their space requirements — especially when it comes to bulky, weather-resistant materials.
For industries like construction, energy, and infrastructure, the calculus is simple: Why pay $12–$18 per square foot to store steel, pipe, or conduit indoors when a well-managed IOS yard can handle the same load at a fraction of the cost?
This cost-conscious shift is prompting developers to rethink site configurations, incorporating more outdoor racking, heavy-duty paving, and stormwater management systems to accommodate these evolving storage needs. As a result, IOS is no longer just a “dirt lot” — it’s an engineered asset built for heavy-duty utility and long-term value.

The Crime Factor: Securing Valuable Assets

One of the less-discussed but highly impactful drivers of demand for IOS is the rise in property crime, particularly theft of valuable equipment, vehicles, and materials. As crime rates climb in various urban and suburban markets, businesses are seeking secure, fenced outdoor facilities to store high-value assets. Whether it's a construction company looking to protect backhoes and excavators or a logistics firm guarding its trailer inventory, secure IOS facilities with fencing, surveillance, and controlled access offer peace of mind — and a compelling value proposition.
The ability to lock down large-scale equipment on a secure, monitored lot has elevated IOS from a simple storage solution to a critical risk-mitigation tool. In this environment, well-located IOS facilities with security infrastructure can command premium lease rates and enjoy low vacancy.

Final Thoughts: The Rise of a Once-Overlooked Asset

What was once considered a low-rent segment of industrial real estate is now a darling of institutional investors. IOS offers a unique combination of high yield, low capex, and resilience to economic cycles. Its value proposition is being reinforced by the very trends that are reshaping the global economy: rising security concerns, booming e-commerce, and cost pressures in traditional warehousing.
For investors, developers, and tenants alike, Industrial Outdoor Storage is proving to be more than just a parking lot — it’s a strategic asset whose time has clearly come.


Recent IOS transactions recorded by Max Fisher, BRD Realty

-34,680 SF of warehouse with 1.1 acres of truck parking at 900 E MacArthur leased to Energy Transport Logistics, represented landlord

-6,847 SF office/warehouse with 1.14 acres of paved fenced yard at 2023 W Price St sold for $1,245,000, represented seller and buyer

-20,000 SF with 3.12 acres at 1455 W River sold to Escalante Concrete Construction for $3,800,000, represented buyer

-11,443 SF industrial building with with 33,017 SF acreage sold to Ninyo & Moore Geotechincal for $1,725,000, represented buyer

-6,734 SF of office/warehouse with 10,000 SF of fenced outdoor storage at 5460 S Arcadia leased to Hulxe Construction, represented landlord and tenant

-7,500 SF of office/warehouse with fenced outdoor storage at 1024 S Euclid leased to Tankhouse Innovative, represented landlord and tenant
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158 Acres of Heavy Industrial zoned land for sale near I-10

A great opportunity for an investment group to finish lots of an industrial subdivision allowing for industrial outdoor storage and industrial development. The owner has already gone through the process to secure type 2 water rights and subdivide the lots.

Located in the fastest growing industrial sub-market in Southern Arizona, the Valencia industrial lots present a great infill development opportunity surrounded by Amazon, The Port of Tucson, Rainbird, Becton Dickson, Target.com and many other major employers.

Marketing brochure link below
valencia_industrial_brochure.pdf
File Size: 1144 kb
File Type: pdf
Download File

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Industrial Market Showing Mixed Signals

4/22/2025

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As we enter 2025, the Tucson industrial real estate market is showing mixed signals. Could vacancy hit 10% in 2026? 10% vacancy is a very real possibility.

Today, Tucson’s industrial vacancy can be described as balanced overall, with rates hovering around 6–7%—a recent uptick. However, most of this vacancy is concentrated in larger spaces over 30,000 square feet, though small to mid-size bays are also seeing a rise in availability.

That said, the citywide vacancy rate only tells part of the story. In some areas—particularly north of Grant Road and I-10—vacancy remains extremely tight, below 2%. In contrast, vacancy has increased around Grant and I-10 and within the Downtown submarket, where leasing activity has slowed.
Rising crime is becoming an increasingly significant factor affecting vacancy, lease rates, and overall property values in these areas.

Lease rates in the Contractor’s Way market are on the rise, driven by strong demand for warehouses with fenced yards that offer secure outdoor storage for materials, heavy equipment, and fleet vehicles. Industrial real estate in the Vail and Marana have become highly desirable.

What ties these trends together is a common motivation: businesses are seeking to relocate to areas with lower crime. In addition, rising incidents of air conditioning and copper theft are pushing up insurance premiums and CAM (Common Area Maintenance) charges for both property owners and tenants.

Another key factor impacting vacancy is the rise in sublease activity. As more tenants put space on the sublease market, we can expect vacancy rates to increase once those lease terms expire. Subleasing is also a leading indicator of future vacancies, even though most market data doesn’t capture it—since the original tenant is still under lease.
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Given that most industrial leases run 3 to 5 years, and considering the surge in leasing activity during the early COVID period, we’re now approaching the 5-year mark—when many of those leases are set to expire. This could result in a notable wave of direct vacancy hitting the market.

Tenants seem to be flocking to quality and affordability but where does that leave the product that is in the middle? Lease rates have increased substantially over the past few years and with new product being built and delivered, tenants can choose between .85 NNN existing product or 1.10 new construction. With that gap so close and vacancy increasing, I think we will see increased lease rates for new construction with more vertical racking capability and lease rate declines for old products, especially the functionally obsolete product that performed well simply because vacancy was so low.


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In 2024 we had more industrial square footage demolished and redeveloped than built and now, around 1,000,000 SF of spec industrial is slated to be completed in 2025. These projects are mostly focused on the larger bay sizes. Small bay construction costs remain high, and lease rates will have to double to justify new construction. While materials costs have dropped, labor costs continue to climb. Overall, construction costs seem to have plateaued. Now with tariff uncertainty we could see another increase in materials costs. We have already seen air conditioning units and parts increase in price and quickly become more difficult to find.
The Tucson Airport market is seeing significant growth in its industrial footprint, with expansions and new construction planned to accommodate air freight, e-commerce, and global supply chain operations. The airport’s proximity to the border also makes it a valuable asset for cross-border trade, and the airport's industrial infrastructure is poised for long-term growth.

With the airport area demand high, land is now scarce. This lack of vacant land in the airport market will push demand outward into areas like Vail. There are also a few vacant parcels that have already been purchased in the Ajo/Palo Verde market that will soon be developed but large parcels of vacant industrial land are now scarce.

The Northwest/Marana market has the highest demand from small-mid bay tenants and buyers. As lots of growth in retail/residential pushes into Marana, the most sought after area in the Southern Arizona region from retailers, consumers and industrial businesses. Lease rates in the Northwest now push North of $1.20 NNN.

The Palo Verde market has seen a quick increase in vacancies. The Palo Verde market is the largest and most dense industrial market. With some owners raising rates 20-30% within the past six months, vacancy has followed suit. We can expect lease rates to compress in the Palo Verde market now that a tenant can tour 10 buildings when just a year or two ago they may have had two options to tour.

From a demand perspective, we expect new demand in the market to mostly stem from the mining industry and housing industry. The industrial golden child, E-commerce, seems to have slowed.  Meanwhile, Sundt’s mining division just purchased the former TuSimple campus in Vail for $22,000,000. With copper prices hitting an all-time high just a month ago and battery minerals in high demand, we can expect the mining industry to continue to grow. Add on tariff policy and critical battery and green energy mineral trade wars with China and domestic minerals become more important than ever.
One unexpected demand driver is re-development. While industrial is highly sought after, retail, entertainment and multifamily values are significantly higher. We will see further re-development demand along with eminent domain demand in the southern market as the state starts to expand I-10 between Alvernon and Kino. Eminent domain of existing industrial buildings is already in process along the I-10 corridor as a new interchange will be built at Country Club and I-10.

The user market remains strong while the investor market trudges along with very low transaction volumes. We expect the user market to remain strong through 2025 as most of these buildings are less than 50,000 SF as this is the size range where vacancy is the lowest and we have yet to see user demand fall. User values are now even pushing $200 per square foot with the highest values in the less than 10,000 SF market and the warehouse with fenced yard market.

Despite fed rate cuts, the ten year remains around 4.3% which means interest rates remain higher. Despite the cost of debt remaining high, there is plenty of demand and dry powder but the gap between buyer and seller expectations has remained too far apart for the past 2.5 years. In addition, the formerly robust 1031 exchange market has almost dried up. When bonds and money markets are yielding 4-5%, it’s tough to justify the management of real estate for a 6% return. In addition to the cost of debt, banks are underwriting in a much more conservative manner.

However, higher for longer may result in increased transaction volume in 2025-2026 as 5-year loans mature and owners will have to decide between selling or refinancing. We are already seeing the beginning signs of distress and sales from maturing debts combined with increased cost in real estate taxes, insurance and CAMs.

Click below to download the Trend Report PDF
fisher_trendreport0525.pdf
File Size: 444 kb
File Type: pdf
Download File


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Max specializes in the leasing and sale of industrial and business park properties, including flex/research and development, warehouse and distribution, and manufacturing space.

As a native Tucsonan, Max inherently understands what makes the community thrive. He has been active in the Tucson real estate market since 2012, and his strong community ties and industrial focus make him a standout in the commercial/industrial arena.  

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Marana Business Park Trades For $2,525,000

2/19/2025

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Max Fisher, BRD Realty, is pleased to announce the successful sale of an industrial business park in Marana, Arizona. The Old West business park, comprised of two multi tenant flex/industrial buildings with 9 tenants. These bays ranged between 1,500-3,000 SF and had 3 phase power, 12' grade level roll up doors and sprinkler systems.  At the time of the sale there was no vacancy.

The business park, strategically located in the heart of Marana (6898-6910 N Camino Martin), attracted strong interest from buyers due to its prime location, functional build outs, and the region’s dynamic economic growth. The sale underscores Marana’s reputation as a key hub for business expansion, with increasing demand for commercial properties fueled by population growth and a pro-business environment.

The Marana real estate market has demonstrated remarkable resilience and growth, driven by factors such as a strong local economy, infrastructure investments, and a business-friendly atmosphere. With ongoing developments and increasing interest from investors, the area remains a hotspot for commercial and industrial real estate activity.

For further information about this sale or future opportunities in Marana’s real estate market, please contact Max Fisher, BRD Realty. 520-465-9989 [email protected]

Max Fisher, BRD Realty represented the seller, Acorn Ventures and Alex Demeroutis and Andrew Keim of PICOR represented the buyer, FJM Investments.


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Tucson Industrial Market Forecast 2025

1/6/2025

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As we enter 2025, the Tucson industrial real estate market is showing signs of continued resilience amid broader national trends. Let’s take a closer look at the current state of Tucson's industrial sector, focusing on vacancy rates, user and investor property values, increased sub-leasing, construction activity, major projects, and national industrial real estate trends that may influence the market.

Vacancy Rates: A Tight Market

Tucson's industrial real estate market remains relatively tight, with vacancy rates hovering at historically low levels but higher than 2021-2023 levels. As of late 2024, vacancy for industrial properties in Tucson is around 5-6%, a figure that has stayed fairly consistent over the past year. Most of this vacancy lies within the 100,000 SF + bay market. This reflects a broader trend seen in the Southwestern U.S, where demand for industrial space outpaces supply but demand for big bay has slowed.

Construction Activity: 1,000,000 SF +-

In 2024 we had more industrial square footage demolished and redeveloped than built. Despite low vacancy rates, construction in the Tucson industrial real estate market has been increasing to meet demand. Developers have responded to the growing need for space by initiating several major projects breaking ground in November of 2024 and set to be completed in the second half of 2025. Around 1,000,000 SF of spec industrial is slated to be completed in 2025.

These projects are focused on the mid to larger bay size range. Small bay construction costs remain high and lease rates will have to double to justify new construction. While materials costs have dropped, labor costs continue to climb. Overall, construction costs have seemed to plateau.
Sub-Markets

The  Tucson Airport market is seeing significant growth in its industrial footprint, with expansions  and new construction planned to accommodate air freight, e-commerce, and global supply chain operations. The airport’s proximity to the border also makes it a valuable asset for cross-border trade, and the airport's industrial infrastructure is poised for long-term growth.

With airport area demand high, land is now scarce. This lack of vacant land in the airport market will push demand outward into areas like Marana and Vail. There are also a few vacant parcels that have already been purchased in the Ajo/Palo Verde market that will soon be developed but large parcels of vacant industrial land are now scarce.

The Northwest/Marana market has the highest demand from small-mid bay tenants and buyers as lots of growth in retail/residential pushes into Marana, the most sought after area in the Southern Arizona region from retailers, consumers and industrial businesses. Lease rates in the Northwest now push North of $1.00 NNN.
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Demand Drivers

We expect demand to remain similar to 2024 trends focusing around e-commerce, mining, defense, aerospace and the ancillary businesses that support the multifamily and SFR new construction market.
One unexpected demand driver is re-development. While industrial is highly sought after, retail and multifamily values are significant higher. We will see further re-development demand along with eminent domain demand in the southern market as the state starts to expand I-10 near Country Club and I-10 and add a new on/off ramp.

Sub-Leasing Increases

While vacancy remains low, we have seen distress from tenants over the past 18 months. Distress in the form of bankruptcies, defaults, and increased sub-leasing. Most of the distress stems from increases in materials and labor costs. Consumer demand remains mostly steady, while dipping in some aspects of the economy. Think big ticket items like furniture and outdoor improvements for example. 

User and Investor Pricing

The user market remains the strongest while the investor market trudges along with very low transaction volumes. We expect the user market to remain strong through 2025 as most of these buildings are less than 50,000 SF and this is the size range where vacancy is the lowest. User values are now even pushing $200 per square foot with the highest values in the less than 10,000 SF market and the warehouse with fenced yard market.

Despite fed rate cuts, the ten year treasury remains above 4.5% which means interest rates remain higher. Despite the cost of debt remaining high, there is plenty of demand and dry powder but the gap between buyer and seller expectations has remained too far apart for the past 2.5 years. In addition to the cost of debt, banks are underwriting in a much more conservative manner.

However, higher for longer may result in more transactions in 2025-2026 as 5 year loans mature and owners have to decide between selling or refinancing.
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Max Fisher’s significant Q4 2024 transactions;
1455 W River - $3,850,000 Sale – Represented Buyer, Escalante Concrete – 20,000 SF
3970 S Evans Road - $1,725,000 Sale – Represented Buyer, Ninyo & Moore Geotechnical – 11,443 SF
4261 S Country Club – Represented Landlord, 420 Aviation LLC – 24,380 SF
6640 S Bonney – Represented Tenant, Sia Botanics – 9,240 SF
 
Total transaction volume for 2024 – 78 Leases & Sales
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1455 W River Sells For $3,850,000

12/16/2024

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Escalante Concrete purchased a 20,000 SF concrete tilt commercial building on a little more than 3 acres to expand current operations. For more than 35 years, Escalante Concrete Construction has provided outstanding service, workmanship and the highest quality placement of both residential and commercial concrete in Southern Arizona.

Max Fisher, BRD Realty represented the buyer and Greg Furrier, PICOR represented the seller, a subsidiary of 4d Properties.

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Three R&D/Lab Deals Closed In September

9/25/2024

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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.
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Ninyo & Moore plans to expand into South Evans, almost doubling their current footprint which is currently at 1991 E Ajo Suite 145, Tucson Arizona. Max Fisher, BRD Realty has now listed 1991 E Ajo Suite 145 for $636,000.
The brochure is linked at the end of this article.

Ninyo & Moore, an ENR Top 500 Design Firm, is a professional geotechnical and environmental sciences consulting firm providing services in geotechnical engineering, engineering geology, geophysics, hydrogeology, soil and materials testing, special inspection, soil and groundwater contamination assessment, site remediation, hazardous building materials, industrial hygiene, and occupational safety.
The second transaction was a 9,240 SF lease at 6640 S Bonney in the Tucson Airport industrial sub-market. Max Fisher, BRD Realty represented Craft Beauty Lab, the tenant and Rob Glaser, Paul Hooker and Tara Kernen of PICOR represented the landlord. The building is a single tenant, 100% AC, heavy power concrete tilt building.

Craft Beauty Lab, a healthy and natural skincare business will be expanding their quickly growing business into 6640 S Bonney.


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The third transaction was a 3,353 SF lab/engineering lease at 2002 N Forbes Suite 102. Max Fisher, BRD Realty represented the landlord and Cameron Casey of Oxford Advisors represented the tenant, Deeproc. Deeproc is an engineering business that is expanding into Tucson.
2002 N Forbes Suite 102 is a 100% air conditioned lab space with I-10 visibility.

Listings newly listed by Max Fisher, BRD Realty
1991 E Ajo Suite 145
$636,000.00
Office/Warehouse/Fenced Yard
Industrial Zoning
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Valencia Industrial
$6,910,000.00
158 Acres
Heavy Industrial Zoning
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Torch Properties Purchases Partial Equity

9/11/2024

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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.


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Torch Properties and BRD Realty look forward to bringing in high occupancy and quality management expertise to both Palmdale Industrial and Oracle Towers.

For leasing inquires, vacancies and pricing, please reach out to Max Fisher, 520-465-9989
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The User Industrial Market Strengthens In Tucson

9/4/2024

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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.
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Summer Industrial Leasing Surge

7/11/2024

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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. 
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158 Acres Listed For Sale - $6,910,000

6/6/2024

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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. 
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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.
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Click below to download the brochure
valencia_industrial_brochure.pdf
File Size: 1144 kb
File Type: pdf
Download File

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