 Businesses searching for a small warehouse for lease in Tucson are entering a noticeably tighter market. While larger industrial buildings may still offer tenants several choices, the supply of functional warehouse and business-park suites under 10,000 square feet has decreased significantly. The shortage is especially apparent among spaces that offer grade-level loading, three-phase power, secure outdoor storage or room to park service vehicles and equipment. In several Tucson industrial submarkets, small warehouses that sat vacant a year ago have now been leased. At Grant & I-10, my availability dropped from approximately 15 vacant suites to just 4 during the past year. That level of leasing activity shows that demand remains strong among contractors, service companies, equipment suppliers, manufacturers, distributors and other local businesses that do not need a 20,000- or 50,000-square-foot building. Vacancy has increased over the summer but the small-medium bay market vacancy has decreased year over year. Tucson Has Lost More Than 50 Small Industrial Bays The tightening market is not being driven by tenant demand alone. Tucson is also permanently losing part of its small-bay industrial inventory. More than 50 warehouse and business-park bays near Grant Road and Interstate 10 have been demolished in connection with redevelopment surrounding the Pascua Yaqui Tribe’s new Casino Del Sol, Vahi Taa’am. The 153,000-square-foot casino development is located at 1055 West Grant Road near I-10. Additional industrial properties are being affected by right-of-way acquisition and construction associated with the widening of Interstate 10 near Country Club Road and Palo Verde Road. The project includes a new I-10 interchange at Country Club Road and the removal of the existing Palo Verde Road interchange. These projects may provide long-term economic and transportation benefits for Tucson, but they also remove older, relatively affordable warehouse inventory from the market. The important point for tenants is that many of these demolished industrial bays will not be replaced with comparable spaces. New Construction Is Unlikely to Replace Affordable Small Warehouses Constructing new small-bay industrial space is expensive. Land prices, construction costs, financing, site improvements and municipal requirements make it difficult for developers to build new 1,500- to 10,000-square-foot warehouse suites at rental rates comparable to Tucson’s older business parks. In many cases, existing lease rates would need to nearly double before new small-bay construction could be economically justified. That creates a widening gap in the Tucson industrial market. Older warehouse suites continue to be absorbed, but developers generally cannot build comparable space at rents most small businesses are accustomed to paying. As older buildings are demolished or converted to other uses, Tucson’s remaining supply of affordable small warehouse space is likely to become increasingly valuable. Marana Has Virtually No Small-Warehouse Vacancy Marana continues to be the most sought-after location for many industrial tenants, particularly contractors and service companies working throughout northwest Tucson. Demand is being driven by residential growth, new commercial development, proximity to Interstate 10 and the desire of many businesses to locate closer to customers in Marana, Oro Valley and the northwest side. Unfortunately, Marana has virtually no vacancy among smaller, functional warehouse properties. A company looking for a 2,000- to 8,000-square-foot warehouse in Marana may have very few options—especially if it also needs a fenced yard, three-phase power or multiple grade-level doors. Tenants focused exclusively on Marana may need to expand their search into northwest Tucson or consider properties with less-than-perfect configurations. Companies that must be in Marana should begin searching well ahead of their desired occupancy date. Warehouses With Fenced Yards and Fleet Storage Are in Highest Demand The strongest demand in Tucson continues to be for industrial properties combining warehouse space with secure outside storage. These properties are especially attractive to:
Unfortunately, fenced industrial yards are limited by zoning, site coverage, neighborhood compatibility and the amount of land required. Even when standard warehouse suites are available, properties that legally accommodate fleet parking or outdoor storage can be much more difficult to find. This is why a warehouse with a fenced yard in Tucson will frequently generate more interest—and lease more quickly—than a conventional office-and-warehouse suite of the same size. Recent Tucson Industrial Leases Demonstrate Continued Demand Recent transactions I have handled illustrate the variety of companies competing for functional industrial space across Tucson.
These transactions reflect an important part of the market that is sometimes overlooked in broader industrial reports. Tucson’s small businesses, contractors and service providers collectively generate considerable demand for warehouse suites under 10,000 square feet. What Tucson Warehouse Tenants Should Expect Companies looking for Tucson industrial space under 10,000 square feet should be prepared to move quickly when a suitable property becomes available. Before beginning a search, tenants should clearly identify:
The Outlook for Tucson Small-Bay Industrial Space The Tucson small-warehouse market is likely to remain competitive. Vacancy has decreased, dozens of older warehouse bays have been removed from the inventory, infrastructure projects are affecting additional industrial properties and current rents generally do not justify widespread new construction. At the same time, demand remains strong for warehouses under 10,000 square feet—particularly spaces with three-phase power, grade-level loading, fenced yards and legal fleet or equipment storage. For tenants, waiting until the last minute could result in limited choices or a longer search. For property owners, the decrease in competing inventory creates an opportunity to improve, reposition and properly market functional small-bay industrial properties. If you are searching for a small warehouse, business-park suite, fenced industrial yard or fleet-storage property in Tucson or Marana, contact Max Fisher with BRD Realty. I track available industrial properties throughout the Tucson market and can help identify options based on your company’s location, power, zoning, loading and outdoor-storage requirements. 
0 Comments
Leave a Reply. |
AuthorMax Fisher, Industrial Properties Broker Archives
September 2026
Categories |
RSS Feed