Skip to content

Call Us Today
(520) 877-2656

  • Home
  • Sales
    • 1st Quarter Sales
    • 2nd Quarter Sales
    • 3rd Quarter Sales
    • 4th Quarter Sales
  • Leases
  • Advertise
  • Subscribe
  • Listings
  • Login
Menu
  • Home
  • Sales
    • 1st Quarter Sales
    • 2nd Quarter Sales
    • 3rd Quarter Sales
    • 4th Quarter Sales
  • Leases
  • Advertise
  • Subscribe
  • Listings
  • Login

Picor: Examining Tucson’s Office Market Recovery – Q2

  • Home
  • News
  • Picor: Examining Tucson’s Office Market Recovery – Q2
News
/
August 4, 2023
/
Real Estate Daily News Service
image_pdfimage_print
By C&W PICOR Communications

TUCSON, ARIZONA (August 4, 2023) -- The Tucson office market is steadily recovering from the pandemic, with tenants adapting to changing dynamics such as hybrid scheduling and condensed workforces. The Tucson office market shows small improvements from the previous quarter, with the vacancy rate dropping to 9.4%, however, the current 2.7 million square feet (sf) on the market still warrants attention. The market conditions offer tenants increased options and leverage in negotiating lease terms and allowances.

To read the full report on Tucson's office activity in Q2, click here.

 

While office investment sales have declined, triple net leased medical properties remain a promising segment, commanding higher sales prices per sf due to the strong presence of medical users driving sustained demand. The Foothills submarket is thriving for office investments, while the Central Business District in Downtown Tucson is working on regaining demand.

Office graphs

 

The industry faces challenges from inflation and supply chain issues, resulting in increased prices for new construction projects. Rising interest rates further impede new development. Despite these challenges, two noteworthy construction projects are underway in Tucson: a 16,137 sf medical building in Oro Valley, estimated for completion in July 2023, and a 14,593 SF medical office in Central Tucson, set to be completed by September 2023. These projects reflect the significant demand from medical users that are driving the office market. Leasing activity in Tucson remains popular within the range of 1,500-3,000 sf, and there remains an influx of behavioral health practices due to available government funding.

The average lease rate for Tucson office space is $21.30 per square feet (sf) representing a slight increase of $1.42 psf from Q1. This positive trend indicates the stability of rental prices. Among the submarkets, the Foothills area has the highest asking rent of $28.24 psf, closely followed by the Southwest submarket at $27.62 psf. On the other hand, East Tucson offers the lowest rate at $15.61 psf. In terms of investment sales, office properties have an average sale rate of $186 psf. Notably, the focal point of investment sales has predominantly been in central Tucson.

 

 

Share Now!

Recent Posts

  • Arizona Motel Sells to Casa Maria for Affordable Housing in South Tucson
  • High Street Residential Completes Construction on 310-unit Smith & Rio in Tempe
  • Tucson Metro Chamber Supports Proposition 496 to Invest in Public Schools
  • Lennar Arizona Closes on $11.5 Million Purchase of 148 Finished Lots in Gladden Farms, Marana, AZ
  • High-profile medical office building trades for $23.3M in the greater Phoenix area

Archives

Newsletter

  • 1st Quarter Sales
  • 2020 SoAZ Forecast Competition
  • 2nd Quarter Sales
  • 3rd Quarter Sales
  • 4th Quarter Sales
  • 5905 East Speedway Blvd, Tucson, AZ
  • Account
  • Advertising
  • Annual Site Access Conditions
  • Archives
  • ASP Test
  • displaycomp
  • Executives Prefer CCIM
  • HELP WANTED
  • Home
  • Ina Capital Development
  • Link Page
  • Login
  • MARKET LEADERS – CCIM DESIGNEES
  • Newsletter Subscription
  • Pima County Real Estate Research Council
  • Privacy Policy
  • RED Comps Terms and Conditions
  • Red Leases
  • Registration-Login
  • rss
  • Sample RED Comps
  • Search Comps
  • searchanalytics
  • searchmapselection
  • searchresults
  • searchshortreport
  • SearchTool
  • Southgate Commerce Park
  • Subscription
  • Team Management
  • Terms of Service
  • Test
  • Test Comp Search
  • Thank You
  • Thank You For Subscribing
  • www.realestatedaily-news.com Privacy Policy
  • About Real Estate Daily News

Copyright © 2023 Real Estate Daily News
Website by: Heart and Soul Web Design

Scroll to Top