CBRE Reports Tucson Retail Big Box Leasing Slightly Increased in 2022

Retail big box leasing activity throughout Tucson moderated from the previous year with a slight increase in square footage leased. Thirty spaces greater than 10,000 sq. ft. were available at the end of 2022, resulting in 1,439,140 sq. ft. of vacant big box space throughout the market compared to 1,670,000 sq. ft. empty space at the end of 2021, according to CBRE’s research.

“The effects of the pandemic have pushed companies to advance their technology to allow customers to order online, have items delivered or use curbside pickup,” said CBRE’s Nancy McClure, First Vice President in Tucson. “The biggest sector winners in 2022 were beauty supplies, fast food and sit-down restaurants, likely an indicator people gained confidence in leaving their homes to dine with others and wanting to look good doing so.”

For a second year in a row, the velocity of new leases signed with big box retailers was more than double what it was in 2020. Metropolitan Tucson signed several 10,000-square-foot leases totaling 348,043 square feet.

Ms. McClure notes that nationally established retailers are reviewing store size for the future. At the same time, some have filed for bankruptcy and are shedding underperforming stores and decreasing occupancy costs. Those large-format department stores leave floorplates that often are difficult to re-lease but are finding new life in mixed-use developments.

“Last year, Park Place Mall’s two-story 154,280-sq.-ft. vacant Sears building was sold to a developer who plans to put climate-controlled self-storage in the basement and design the remaining ground-level space for new retail, restaurants and entertainment in the future.”