Tucson’s retail market continued its robust growth with over 262,000 square feet (sf) of positive net absorption for this quarter, which exceeded the first and second quarter’s combined absorption of 256,205 sf. Pent-up demand in the market spurred an increase in retail space under construction from 123,402 sf in Q2 to 149,218 sf this quarter. Vacancy ticked-down slightly from 6.4% to 6.2%.
Tucson is following a national trend, transitioning retail storefronts over to service providers. Almost half of the largest lease deals this quarter followed this national trend from retail to service. The Broadway corridor continues to undergo change and redevelopment with new quick service restaurants (QSRs) consistently crowding the submarket. Most recently announced, two burger concepts, Habit and Graze will join Five Guys in the 5000 block of Broadway near Park Place Mall begging the question “is there saturation in the burger concept?”