“Most people think of Tucson as sunshine, cactus, and golf,” says Bruce Wright, associate vice president for economic development at the University of Arizona. “They're surprised we have a top university here and a robust and emerging high-tech industry. We're not a sleepy little retirement town in the desert.”

Yet the city still retains some remnants of its frontier past. Plenty of people in the Old Pueblo (Tucson's nickname) still see lush possibilities in an arid landscape. Master planned communities, office parks, and resorts are supplanting cactus and creosote trees outside the city's center. And the historic downtown core is being redeveloped into a 24-hour community of business, recreational, and residential properties.

“The Tucson region is blessed with a strategic southwestern location, a diverse and educated workforce, a bilingual population, competitive cost of living, and direct access to the Mexico market,” says Laura Shaw, vice president of marketing and communications at Tucson Regional Economic Opportunities Inc., an economic development organization.

Adds Wright: “There's a real entrepreneurial spirit here. This is a wide-open town with a pro-business atmosphere.”

Population and Job Growth

Tucson has 1 million people and is growing about 2 percent annually. The civilian labor pool is approaching 450,000. Unemployment is currently around 4 percent.

Office Market

Office vacancy is just over 12 percent, according to the Pima County Real Estate Research Council. The rental rate for existing high- and mid-rise space is $24–$25 per square foot, full-service gross.

Residential Market

Only about half of Tucson's residents can afford the $257,900 existing-home median price.

Market Strengths

  • Strong job growth
  • Low unemployment
  • Low retail vacancy

Market Concerns

  • Declining home affordability
  • Potential job losses in information and manufacturing
  • Strained transportation infrastructure

Business Incentives

Empowerment Zone businesses are allowed to accelerate depreciation on new tangible personal property (up to an additional $35,000 write-o. in the year that the assets are placed into service). They also may be eligible for rollover and partial exclusion of gains on the sale of qualified assets.


“Tucson is turning the corner,” says developer Adam Weinstein, president of The Gadsden Co. (With the Gadsden Purchase in 1853, the United States bought portions of New Mexico and Arizona, including Tucson, from Mexico.) “The city is making a commitment to downtown by creating nice mid-density projects for the core. And the biggest improvement is the [$200 million in recently approved] transportation infrastructure improvements [including new-road construction and a four-mile street car route running from the University Medical Center to the Rio Nuevo development downtown]. That's going to make a big difference.”

Key Architects

Gresham & Beach Architects
Major project: The 29,000-square-foot, $5.4 million St. Andrew's Presbyterian Church, completed in 2005.
The firm was founded in 1995 after a 10-year affiliation with international architecture firm NBBJ.

Rob Paulus Architect
Major project: The $2.5 million, nine-unit Barrio Metalico residential project, completed in 2005, which won a Western Mountain Region AIA award.
Paulus, a Tucson native, founded the six-person firm in 1995.

SBBL Architecture & Planning
Major project: The recently completed $17 million, 122,000-square-foot MYSIS corporate headquarters building; developed by Bourn Partners.
The 22-person firm was founded in 1997 by Thomas Sayler-Brown.

Key Developers and Builders

Pathway Developments Inc.
Major project: The $75 million Santa Rita Hotel conversion to a condo-hotel, scheduled to be completed in 2009; designed by Kevin B. Howard Architects.
Other Tucson projects include the Marriott Townplace Suites, the Casas Adobes Office Park, and several residential developments.

Randi Dorman, Warren Michaels, and Rob Paulus
Major project: The $9 million indigoMODERN, a 22-unit “townloft” infill community for which the first phase is complete; designed by Rob Paulus Architect.
The trio also developed the award-winning downtown infill projects Ice House Lofts and Barrio Metalico.

KB Home
Major project: The 85-unit Glenn Court, which received the Sonoran Institute's 2006 Building from the Best Award; designed by KB Home.
The company has 16 communities in the Tucson area and is the first builder in the state to earn National Housing Quality certification.