Tucson Retail Market Report

Amid shifting demand, constrained supply preserves market balance. While employment gains have moderated, Tucson’s affordability and sustained in-migration — surpassing 10,000 new arrivals for a fourth consecutive year — reinforce the market’s retail stability, particularly among health care and manufacturing employment hubs. Even as big-box closures — including Sam Levitz — created vacancies, discount retailers such as Burlington and Dollar Tree quickly backfilled space, sustaining net absorption. Supply constraints persist, with only 180,000 square feet delivered in 2024 and just 70,000 square feet underway, most of which is preleased. As a result, vacancy will stay near its historical 6.5 percent average in 2025. Meanwhile, expansions like American Battery Factory’s $3.1 billion gigafactory, opening in 2025, broaden the metro’s job base, supporting longterm consumer spending amid a cooling labor market.