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Market Report

Tucson Retail Market Report

2Q 2023

Higher Incomes and Strong Residential Gains
Guide Expansion Plans in North and South Tucson

Affluent households prop up metrics in northern suburbs. While the metro's vacancy rate hovered around the long-term mean of 6.9 percent over the past 12 months, conditions in North Tucson were tighter than in recent years. Encompassing areas north of the Rillito River, the submarket is known for its high-earning households and a median home price nearly double the market benchmark. An affluent resident base is aiding local retail sales and demand for available space, with recent absorption exceeding the long-term local average. This positive leasing and mild deliveries over the past year allowed vacancy to fall to 5.2 percent. Strong space demand during this stretch, however, also supported a refilling of the local construction pipeline, potentially impacting vacancy in the coming quarters. 
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