Who's out there signing leases
The tenants doing deals in Tucson right now fall into five buckets: fitness, value/discount, experiential, grocery and drive-thru food and coffee. Here are the names we've seen move this year:
Nationally, value retail is leading the 2026 store-opening wave, with Dollar General, Aldi, Ollie's and Barnes & Noble all expanding. Tucson is still waiting on its first Aldi.
The hottest submarkets
The tightest parts of town are all sitting under 3.5% vacancy, and the Southeast is the standout. It's running 2.7% vacant with average asking rents of $34.32/SF NNN, by far the highest in the metro, with another 45,279 SF under construction to serve the Rita Ranch, Civano and Vail rooftops.
Behind it, the Southwest (2.9%), West (3.0%), South/Southwest Outlying (3.2%), Foothills (3.3%) and Central West (3.5%) are all functionally full. If you're a tenant looking in any of those areas, expect to compete for space and move quickly when something comes up.
The South submarket deserves its own mention. It absorbed 223,208 SF in Q3 alone, the most of any submarket, and vacancy dropped to 6.0%. Bass Pro Shops (100,974 SF) opening at Tucson Marketplace has pulled traffic and co-tenancy interest to the I-10 and Kino corridor.
Where the vacancy is
If you're a tenant looking for options or leverage, look east and look older. The East submarket is carrying 10.8% vacancy, over 1.06 million SF sitting empty, and it has given back 260,560 SF year-to-date. Central East (8.8%) and Downtown (7.4%) round out the softer areas.
North/Oro Valley shows 10.3% vacancy, but that number needs context. It's absorbing space (72,065 SF in Q3) and still commands $25.25/SF, among the highest rents in town. Positive absorption plus top-tier rents points to lease-up, not distress.
The real soft spot is older neighborhood and strip centers, where landlords are facing the most vacancy and concession pressure. Big boxes are part of it too: at year-end 2025, Tucson had 58 vacant spaces over 10,000 SF totaling about 1.68 million SF, with an average asking rate of $12.13/SF NNN. Thirteen of those are 30,000 SF or larger.
Repurposing: old boxes, new uses
With almost no spec construction, the growth in Tucson retail is coming from reworking what's already here. A few of the moves that stood out this year:
WinCo Foods on East Broadway. WinCo paid $18 million in August for 11.59 acres at 5205 E. Broadway near Craycroft, with about 120,000 SF of existing buildings, per Connect CRE. WinCo hasn't confirmed a store, but the site fits its 84,000 SF prototype and would be its first in Tucson.
Bourn Companies on the Park Place stretch. Bourn picked up a 153,511 SF property at 5850 E. Broadway for $6.1 million in Q3. Given what Bourn is doing at Uptown, this one is worth watching.
Big boxes going experiential. Urban Air Adventure Park signed 29,627 SF at 7125 E. Broadway and Just Between Friends took 26,500 SF at 2520 S. Harrison in Q3. In 2025, Slick City (36,454 SF), Lava Island (40,018 SF), Savers and two Planet Fitness locations backfilled big boxes.
Retail to mixed-use. The former Foothills Mall is the poster child (more on Uptown below), and we expect more obsolete boxes to be torn down for reimagined, mixed-use sites rather than re-tenanted.
The takeaway for owners of older boxes: the tenant may not be a retailer. Fitness, entertainment, thrift, grocery and even housing are all in play.
The Salad and Go fight: Dutch Bros vs. 7 Brew
The biggest retail real estate story in Arizona this year wasn't a mall or a power center. It was a fight over small drive-thru boxes, and Dutch Bros lost it.
Salad and Go filed Chapter 11 on Aug. 4 and closed every remaining store the next day, including seven in Tucson. Within days, a holding company tied to the Dutch Bros founders agreed to buy the assets for $105 million, per KOLD. Arkansas-based 7 Brew objected, forced an auction, and won it on Aug. 31 with a $143.18 million bid for 73 sites. Dutch Bros declined to raise its offer and became the backup bidder, per KTAR.
After 7 Brew trimmed its list, the court approved a $123.5 million sale of 63 leases on Sept. 29. That works out to roughly $2 million per lease for the right to step into a used drive-thru, per KTAR.
The Tucson sites going to 7 Brew: 5501 E. Speedway, 7980 E. Speedway, 3220 N. Campbell, 1302 S. Kolb, 2080 W. River and 10071 E. Old Vail. The seventh, at 1730 E. Tucson Marketplace Blvd., went to Swig, per KTAR. 7 Brew had only two Tucson stores before this, so it's about to quadruple its local footprint.
Why it matters for owners: 7 Brew's attorney told the court the Salad and Go buildings are small, have no kitchen hood and would be easy to convert, per the Arizona Daily Star. That's the whole point. Small, hood-free drive-thru buildings with good stacking are now one of the most fought-over product types in the state.
Uptown Tucson: from dead mall to urban village
Bourn Companies' Uptown, the 2.5 million SF redevelopment of the former Foothills Mall at Ina and La Cholla, crossed its first real milestone this summer. The Astrie, the area's first mid-rise apartment building, opened June 26 with residents moving in, per KOLD.
Here's where the rest of phase one stands:
Tempo by Hilton Tucson Uptown. The 144-room hotel topped out earlier this year and is targeting a January 2027 opening, per KGUN 9. It's the first of up to three hotels planned on site.
First retail and restaurant tenants. Barnes & Noble, restaurants Clio and Memoir, and Los Milics Vineyards are targeting spring 2027 openings, per Retail & Leisure International.
The neighborhood is already reacting. Fiery Crab Seafood & Bar signed 11,638 SF just up the road at 7625 N. La Cholla in Q3.
Bourn is building toward a walkable mix of apartments, townhomes, shops, restaurants, hotels, office and a public gathering space, with additional phases rolling out over the next decade. For the Northwest and Foothills submarkets, Uptown adds rooftops and daytime traffic that didn't exist when this was a struggling outlet mall. Expect restaurant and service operators to follow.
More big moves: Costco, Bass Pro and Downtown Marana
A second Costco on the northwest side? The rumors of a new Costco near Sunset Road and I-10 are starting to look real. Pima County signed a non-binding letter of intent to sell about 56.66 acres of vacant county land at 3601 W. Sunset Road, the southwest corner of the new Sunset/I-10 interchange, to Costco Wholesale for $15 million, per KVOA. Costco hasn't confirmed anything, and the deal still has to clear due diligence and county approval. The site also holds an archaeological dig more than 3,000 years old, which could slow things down, per KJZZ. Still, with the Sunset Road extension and I-10 widening now done, that interchange just became one of the best-connected sites on the northwest side. Add the planned 158,000 SF Costco at Old Vail and Houghton, and Tucson could be looking at two new warehouse clubs.
Bass Pro Shops is open on the south side. The 100,974 SF Bass Pro Shops Outdoor World near I-10 and Kino at Tucson Marketplace held its grand opening in March, per KGUN 9. It's a regional draw, and it's a big reason the South submarket absorbed 223,208 SF in Q3, more than any other part of town. Expect pad and shop-space demand to keep building around it.
Marana is building a downtown with Western flair. The Town of Marana approved a lease and development agreement with Marana Urban LLC in December for 19 town-owned acres east of Marana Main Street and north of Civic Center Drive, per KOLD. The first phase calls for restaurants, a spa and outdoor gathering space, with five phases planned over 11 years. Town leaders want it to carry on Marana's Western heritage, with early plans including a dance barn, rodeo areas and event space, per KOLD. For restaurant and entertainment operators looking north of Tucson, it's one to watch.
Second-gen restaurants and drive-thrus are the strongest product in town
If there's one product type we'd want to own in Tucson right now, it's a freestanding building with a drive-thru lane and an existing kitchen. The math is simple. New ground-up construction costs keep climbing, and every operator that can skip the hood, grease trap and drive-thru build-out saves real money and months of time. That's a big reason second-generation space keeps getting absorbed ahead of anything new.
What that looks like on the ground:
Drive-thru rents are well above the market average. A 1,140 SF second-gen restaurant with a drive-thru at 1655 S. Alvernon, the former Toss Fried Chicken, is listed at $31.50/SF NNN, per CommercialCafe. That's more than 60% over the $19.44 metro retail average.
Operators are subleasing, not going dark. Blake's Lotaburger is marketing second-gen drive-thru subleases at 1600 W. Valencia and 3560 N. Craycroft, the latter with a 19-car double stack, per CommercialCafe. A former Starbucks drive-thru at 3700 S. 6th Ave. is back on the market too, per LoopNet. These won't sit long.
Investors are paying up. A new Chipotle drive-thru at 10100 E. Old Vail with a 15-year absolute NNN lease was recently marketed at a 4.70% cap rate. The metro retail average is about 7.6%.
The Salad and Go auction set the tone. Coffee chains paid roughly $2 million per lease just to take over used drive-thru boxes.
For landlords with a vacant pad or an end-cap that can take a drive-thru, the ask has shifted. Tenants are competing on stacking, access and visibility, and they're willing to pay for it.
Just listed: the former eegee's at Alvernon and 29th
Max Fisher and Ryan Shirley of BRD Realty just listed exactly the kind of product this post has been talking about: a second-generation drive-thru on a hard corner. The former eegee's at 1875 S. Alvernon Way is ready for its next operator.
±2,356 SF freestanding restaurant with a drive-thru pick-up window and wrap-around stacking lane
Hard corner of Alvernon Way and 29th Street, with about 47,500 combined vehicles per day (34,600 on Alvernon, 12,900 on 29th, PAG 2025)
Kitchen infrastructure in place: floor drains and floor sinks, 3-compartment sink, hand and mop sinks
Renovated dining room with LED lighting, plank tile, window bar seating and two customer restrooms
C-2 zoning, City of Tucson
Two-street access with drives on Alvernon and 29th, plus 281 shared parking spaces across the 6-acre Midpoint center
Strong neighbors: Fry's, Walgreens, Dutch Bros, McDonald's, QuikTrip and the 22nd Street auto row, with Reid Park and Davis-Monthan close by
Ideal for coffee, QSR or fast casual, smoothie and juice, bakery, boba or a pick-up-first concept
Lease rate: contact Ryan Shirley and Max Fisher, BRD Realty
