Quote:
Originally Posted by aznate27
I think this is great news! Does anyone know what the occupancy level would have to be downtown before someone would consider another office high-rise? I think 70% is a good number but still low as far as the possibility of a new building going up.
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Generally, there isn't much demand for new office construction until the vacancy rate gets down below 12-15%, or less than half of downtown Tucson's current 30% vacancy. And since the Great Recession, financing isn't usually available for larger projects until a majority of the space is preleased. Thus, Tucson's best hope for another downtown tower would be to land a major tenant who wants to occupy a good chunk of the new building.
With local commercial Class A space averaging around $20/s.f. and all the new amenities downtown, Tucson might be getting a second look from firms paying anywhere from $30-45/s.f. in the LA and SF markets, for example.