Vacancy Inches Up as Construction Pipeline Remains Active

TUCSON, AZ (November 14, 2025) — Cushman & Wakefield | PICOR has released the Tucson Industrial Market beat. Tucson’s industrial sector remained stable through the third quarter of 2025, supported by rising incomes, steady job growth, and resilient tenant demand despite a softer national economic backdrop. Median household income grew to $74,000, up 3.2% year-over-year, while nonfarm employment reached 398,100 jobs. The unemployment rate edged up to 4.2%, but population growth—though moderating to 0.6%—continues to outpace the national rate and fuel demand for housing and services.

Vacancy and Absorption
Overall, industrial vacancy increased slightly to 6.6%, as new development continues to outpace absorption. Year-to-date net absorption stands at –413,186 square feet, reflecting slower activity in select submarkets, particularly Southeast Tucson. Despite the negative absorption, demand from logistics, e-commerce, and traditional industrial users remains healthy, especially in the Airport and Northwest submarkets.

Construction & Pipeline
A total of 906,855 square feet was under construction at the end of Q3, with the Airport area leading activity. No major projects were delivered this quarter, though several speculative buildings are scheduled through early 2026 and are expected to push vacancy higher upon completion. Key 2025 completions to date include Mueller Inc. (24,984 SF) and Avanti (20,900 SF).

Leasing Activity
The largest lease this quarter was Werner Aero (30,000 SF) at 845 E. Ohio Street, followed by Stevens Equipment Supply (24,822 SF) and Lennox Industries (11,166 SF, renewal). Activity was strongest in the Airport, Northwest, and Palo Verde submarkets, with user demand remaining steady even as clean-energy-related site searches paused.

Investment Sales
Sales volume was limited but supported by solid fundamentals. Notable transactions included two large assets traded as part of a national portfolio: 3780 E. Valencia Rd. (259,279 SF) and 6690 S. Alvernon Way (244,889 SF), both sold from Bridge Investment Group to Apollo Global Management. Other sales included assets in Downtown, Park/Ajo, and Palo Verde priced between $43–$560 PSF.

Pricing & Rents
Average asking rents held steady at $0.83 per square foot per month, unchanged from Q2 as developers balanced rising construction costs with moderated demand. Single-tenant buildings with yard space remain the most competitive, supporting stable rents across core industrial corridors.

Outlook
The market is positioned for continued stability heading into 2026, with moderate leasing demand, a cautious investment environment, and a substantial speculative construction pipeline that will shape future vacancy and rent trends.

Read the full report here.

Tucson, AZ (November 13, 2025) Northmarq’s Phoenix-based Multifamily Investment Sales team — led by Trevor Koskovich, Jesse Hudson, Ryan Boyle and Logan Baca — brokered the $31.734 million ($101,711 per unit) sale of Ventura Villas, a 312-unit multifamily community located at 6200 S. Campbell Ave. in Tucson, Arizona.

Northmarq represented the seller, RDM Tucson, LLC. The buyer was Pacific Transwest – Nevada, Inc.

“This transaction underscores the growing momentum of capital flowing into Tucson’s multifamily sector,” said Hudson. “At a price per unit of $101,712, the buyer recognized not only the intrinsic value of Ventura Villas but also the upside potential in a market that’s increasingly favoring value-add strategies.”

Built in 1989, Ventura Villas features one- and two-bedroom apartment homes, averaging 606 square feet. The community features a resort-style swimming pool, basketball court, playground, laundry facilities, and more.

Located in South Tucson, the market continues to experience unprecedented job growth and major economic development, fueling demand for multifamily housing.

“Tucson is attracting new attention as one of the top emerging multifamily markets in 2025, and this deal reflects a broader trend: capital seeking disciplined entry points where performance can be improved with focused upgrades, operational efficiencies, and strong underwriting discipline,” Hudson added.

For more information, Koskovich can be reached at 602.952.4040, Hudson is at 602.952.4042, and Baca is at  602.952.4052.

Source: RED Comp #12137.

Bella Grace, a 194-unit BTR community in Chandler, AZ

Chandler, Arizona  (November 13, 2025) – Berkadia, a distinguished leader in the commercial real estate sector, announced today the sale of Bella Grace, a 194-unit, horizontal build-to-rent (BTR) community located in Chandler, Arizona. Senior Managing Directors Mark Forrester and Ric Holway, Managing Directors Dan Cheyne and Andrew Curtis of Berkadia Phoenix led the transaction on behalf of the seller, an affiliate of Illinois-based The Inland Real Estate Group of Companies, Inc.

Bella Grace sold for $69 million to California-based Golden Horizon Enterprises.

“Bella Grace presented investors with a unique opportunity to acquire a premier asset in the BTR supply-constrained Chandler submarket of metro Phoenix,” said Forrester. “Given excellent stewardship since Inland’s 2018 acquisition, this community consistently registered a high occupancy without concessions and has demonstrated consistent net rental growth.”

Constructed in 2017, Bella Grace presents an appealing mix of one-bedroom, two-bedroom, and three-bedroom single-story, low-density, for-rent apartment homes in Chandler’s high-growth, suburban submarket of Metro Phoenix. Each unit features thoughtfully designed floor plans with 10-foot ceilings and large private backyards. Attractive community amenities, including a resort-inspired pool and spa, oversized private double dog park, walking paths, and a picnic area, complement the units. This thoughtfully crafted site plan, complemented by well-distributed open areas, offers residents a distinct sense of privacy.

Bella Grace’s strategic location near the Superstition Freeway, Loop 101, and Loop 202 provides unrivaled access to the diverse, high-wage employment throughout the East Valley.