TUCSON, Ariz. – March 18, 2024 – Retail big box leasing activity throughout the Tucson area was robust in 2023. Thirty-two spaces greater than 10,000 sq. ft. were available at the end of 2023, resulting in 1,289,000 sq. ft. of vacant big box space throughout the market compared to 1,439,140 sq. ft. empty space at the end of 2022, according to CBRE's research.
"Although store sales moderated in 2023 after a couple of years of post-pandemic surges, what has become clear is that having physical stores helps boost sales," said CBRE's Nancy McClure, First Vice President in Tucson. "The quest from retailers is determining the right-sized space. Department stores are looking to downsize and get closer to customers outside the malls; retailers gaining traction in sales often look to get a bigger footprint to stock more merchandise.
Locally, Tucson had three large retailers' announcements: Fry's Marketplace broke ground on a site at Tangerine Road in Marana (the company bought the land in 2008); Home Depot closed escrow on a site in Houghton Town Center at Houghton and Old Vail roads (a site it had in escrow over a decade ago); and Bass Pro Shops signed a ground lease at the Marketplace at the Bridges.
A wave of large space vacancies flooded the national markets, and Tucson felt the ripple effect. Ms. McClure notes that for ownership, it's the right price, and being responsive to offers often secures the tenants in the market. Even so, some retail boxes will likely be demolished to create a new concept or a reimagined overall development with mixed uses.
With the closure of retailers like Bed Bath & Beyond, it was just the right location and size to meet those waiting to lease. Sportsman's Warehouse leased a former Bed Bath & Beyond at I-19 and Irvington Road, Roadhouse Cinemas leased the former Bed Bath & Beyond at Grant and Swan roads for its Rail Yard concept that has additional entertainment venues, and dollar stores found surplus drug store buildings a great fit in various locations. The long-vacant Kmart at Broadway Blvd and Kolb Road was demised to accommodate Floor & Décor's expansion needs when it hopped across the intersection, leaving its former space vacant.
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