With Tucson personal median income rising 5.4% over the year and population growing by 1.0% Tucson is feeling positive economic affects across the board but how is the industrial market directly affecting Tucson?
Here are just a few of the effects of our strong industrial market,
Rents for spaces under 5,000 sf will rise 10-15% in 2019. Expect growing demand among service companies and other construction-related trades. Even at a historically strong occupancy rate, Tucson’s market has room to improve, as several high profile, larger buildings over 200,000 sf are ripe to be absorbed, essentially bringing Tucson to full occupancy.With vacancy across the region expected to drop below 5.0% in 2019, market dynamics will shift, and new development will occur as rents justify new construction.
Key local employers in mining and aerospace/defense sectors like Raytheon have quietly expanded their employment bases in Tucson, and we have seen a rise in prospects considering bringing jobs to the region.
With inventory tight, one developer broke ground on a new 157,000 sf building with intermediate bay sizes to fill the market void. Others began positioning with land acquisitions pending further rent inflation to support new construction. There are rumblings in the market for new spec development buildings in the Northwest market. These spec buildings will spur economic development and attract new companies to Tucson, effectively creating more jobs.
Max Fisher, Industrial Properties Broker