Tucson's industrial real estate market is being reshaped by three converging forces: the nearshoring of manufacturing from Asia to Mexico, the expansion of defense and aerospace operations anchored by Raytheon Missiles and Defense (RTX Corporation), and the metro's strategic position along the I-10 and I-19 trade corridors connecting the Nogales port of entry to markets across the Western United States. As of Q3 2025, industrial vacancy in Tucson stood at approximately 6.6%, and major projects like Lincoln Property Company's $80 million I-10 International campus are adding Class A warehouse and distribution space near Tucson International Airport. For investors and owner-occupants looking to acquire, develop, or refinance industrial properties in Southern Arizona, understanding the financing landscape is essential to capitalizing on these structural trends.
This guide covers everything you need to know about industrial property financing in Tucson, from current loan rates and program options to submarket dynamics and the step-by-step process for securing your loan.
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What Are Current Industrial Loan Rates in Tucson?
As of early 2026, industrial property loan rates in Tucson vary based on asset quality, tenant strength, loan structure, and borrower profile. Here is what industrial borrowers are seeing across the major financing categories:
- Bank Portfolio Loans: 5.8% to 6.5% for stabilized, well-tenanted industrial properties with strong borrower relationships
- Life Company Loans: 5.5% to 6.2% for core stabilized warehouse and logistics assets with investment-grade or credit tenants
- CMBS Loans: 6.2% to 6.8% for larger industrial complexes and multi-tenant parks, with spreads of roughly 200 to 275 basis points over treasuries
- SBA 504: Approximately 6.0% to 6.5% fixed rate on the second mortgage for owner-occupied industrial buildings
- Bridge Loans: 8.5% to 12.0% for value-add acquisitions, repositioning projects, and lease-up situations
- Construction Loans: SOFR + 275 to 475 basis points, translating to approximately 7.0% to 8.5% for ground-up warehouse and distribution development
- Hard Money: 10% to 14% for asset-based, fast-close industrial transactions
Tucson's industrial properties often generate favorable underwriting metrics due to the metro's lower cost basis compared to Phoenix. A warehouse that might trade at $120 to $150 per square foot in Phoenix's West Valley can be acquired at $80 to $110 per square foot in Tucson's Airport or Marana submarkets, producing higher debt service coverage ratios and stronger debt yields at the same rental rates.
Use our commercial mortgage calculator to estimate monthly payments and total interest costs for your Tucson industrial property acquisition.
Which Industrial Loan Programs Work Best in Tucson?
The right financing program depends on your property type, investment strategy, and timeline. Here are the most common options for Tucson industrial borrowers:
SBA 504 Loans for Owner-Occupied Industrial
The SBA 504 program is one of the most powerful tools for business owners purchasing or building their own industrial facilities in Tucson. The program combines a conventional first mortgage with a 20-year, fully amortized second mortgage guaranteed by the SBA, allowing borrowers to put as little as 10% down. For manufacturers, distributors, and logistics companies establishing or expanding operations in Tucson, the SBA 504 program provides long-term fixed-rate financing that locks in occupancy costs and builds equity.
SBA loans are particularly well-suited for businesses in Tucson's growing aerospace supply chain, cross-border logistics operations, and advanced manufacturing sectors that need to acquire or build industrial space.
Bridge Loans for Value-Add Industrial
Bridge loans fill a critical need in Tucson's industrial market for investors acquiring properties that need renovation, tenant improvements, or lease-up before they qualify for permanent financing. With industrial vacancy edging up slightly and some speculative deliveries creating competition, there are opportunities to acquire older industrial buildings at favorable prices and reposition them for modern tenants. Bridge rates of 8.5% to 12% for terms of 12 to 36 months provide the time and capital needed to execute these strategies.
Estimate your bridge financing costs with our commercial bridge loan calculator.
Permanent Loans for Stabilized Industrial
Fully leased industrial properties with creditworthy tenants and long-term leases are prime candidates for permanent financing through banks, life companies, or agency programs. These loans offer the lowest rates in the market, typically 5.5% to 6.5%, with terms of 5 to 25 years and amortization periods of 25 to 30 years. In Tucson, warehouse and distribution buildings with national tenants and NNN lease structures receive the most favorable permanent loan terms.
CMBS Loans for Larger Industrial Assets
Conduit loans (CMBS) are appropriate for larger industrial properties or portfolios with loan amounts above $3 million. These programs offer non-recourse financing with competitive rates and longer terms, making them attractive for institutional-quality industrial assets in Tucson's Airport submarket and I-10 corridor. CMBS lenders typically require strong occupancy and a diversified tenant roster.
Construction Loans for Ground-Up Development
For developers building new industrial product in Tucson, construction loans provide the capital needed to take projects from site work through completion and lease-up. Rates of SOFR + 275 to 475 basis points reflect the development risk, with loan-to-cost ratios typically capping at 60% to 70%. Developers targeting the Airport submarket and Northwest Marana corridor are finding strong demand for modern, high-clear-height distribution space.
How Is Tucson's Industrial Real Estate Market Performing?
Tucson's industrial market benefits from structural demand drivers that distinguish it from many secondary markets:
Market Fundamentals
As of Q3 2025, Tucson's industrial vacancy stood at approximately 6.6%, edging up slightly as recent speculative deliveries hit the market. After a wave of new construction in 2023 and 2024, the metro's vacancy has moved from the low single digits toward a more balanced range. Modern, well-located space in the Airport submarket, Northwest Marana corridor, and along the I-10 logistics route continues to lease faster than older product in fringe locations. Flex and specialized industrial serving advanced manufacturing, aerospace, and clean-energy sectors remain relatively resilient, while large-bay bulk logistics space may face longer lease-up times in some areas.
Rent growth has decelerated from the rapid pace seen in prior years, with average asking rents now growing well below the national average. Some submarkets may see flat or slightly negative effective rent trends as landlords increase concessions to attract tenants. However, this environment creates favorable conditions for tenants and buyers, particularly those tied to advanced manufacturing and cross-border trade.
Nearshoring and Cross-Border Trade
One of the most significant structural tailwinds for Tucson's industrial market is the nearshoring trend. As companies shift manufacturing from China and Asia to Mexico, Southern Arizona is becoming a natural staging area for warehousing, light assembly, final configuration, and compliance operations. Tucson's proximity to the Nogales port of entry along I-19, combined with I-10 access to markets across the Southwest, positions the metro to capture this demand.
Tariff actions on steel, aluminum, automotive components, and Chinese goods moving through Mexican supply chains are increasing the value of locations that can leverage Foreign Trade Zones and efficient logistics to manage landed costs. The I-10 International campus near Tucson International Airport sits within a Foreign Trade Zone specifically to serve this demand.
Defense and Aerospace Demand
Raytheon Missiles and Defense (RTX Corporation), Tucson's largest private employer, anchors a defense and aerospace cluster that generates demand for specialized industrial space including clean rooms, testing facilities, assembly space, and secure storage. The defense supply chain extends to dozens of smaller manufacturers and subcontractors who require industrial space throughout the metro. Davis-Monthan Air Force Base, home to the 355th Wing and the renowned Boneyard aircraft storage facility, adds additional defense-related industrial demand.
Key Development Projects
Lincoln Property Company's I-10 International Phase I recently delivered 373,811 square feet of Class A industrial space across two warehouse and distribution buildings on 79 acres near Tucson International Airport. This $80 million development is located within a Foreign Trade Zone in a submarket that already houses Amazon, FedEx, DHL, Pepsi, Home Goods, Intuit, and Raytheon operations. Additional industrial development is planned along the I-10 corridor and in the Northwest Marana corridor as demand from logistics and manufacturing tenants continues.
Which Tucson Submarkets Are Best for Industrial Investment?
Tucson's industrial properties are concentrated in several key corridors, each with distinct characteristics and tenant profiles:
Tucson International Airport Submarket
The Airport submarket is the epicenter of Tucson's industrial growth. Proximity to Tucson International Airport, the I-10 and I-19 interchanges, rail connections, and Foreign Trade Zone designation make this the preferred location for logistics, distribution, and aerospace tenants. Lincoln Property Company's I-10 International campus, Amazon's fulfillment operations, and multiple freight and logistics providers cluster in this area. Industrial cap rates here range from roughly 6.0% to 7.0% for modern product, with older buildings offering higher yields.
Northwest Marana Corridor
Marana is one of Southern Arizona's fastest-growing communities and its industrial base is expanding rapidly. Access to I-10, abundant developable land, and a business-friendly municipal government have attracted manufacturers, distributors, and logistics companies to this corridor. The area offers newer industrial product at price points below the Airport submarket, making it attractive for both owner-occupants and investors. Cap rates typically range from 6.0% to 7.5%.
South Tucson and I-19 Corridor
The I-19 corridor south of Tucson connects the metro to the Nogales port of entry and serves as a key artery for cross-border trade. Industrial properties along this corridor benefit from proximity to the border and from the growing flow of goods between Mexico and U.S. markets. Older industrial buildings in South Tucson offer value-add opportunities with cap rates of 7.0% to 8.5%.
East Side and Pantano
East Tucson's industrial base includes flex space, light manufacturing, and smaller warehouse properties that serve the defense supply chain and local businesses. Proximity to Davis-Monthan AFB creates demand from defense contractors and maintenance operations. Cap rates range from 6.5% to 8.0% depending on building quality and tenant profile.
Oracle Road and North Tucson
Smaller flex and industrial properties along the Oracle Road corridor serve a mix of small businesses, trades contractors, and service companies. These properties trade at higher cap rates of 7.5% to 9.0% and are popular with SBA borrowers seeking owner-occupied space.
What Types of Industrial Properties Can You Finance in Tucson?
Lenders in the Tucson market finance a wide range of industrial property types. Here are the most common:
Warehouse and Distribution: Large-bay facilities with 24 to 36 foot clear heights, dock-high loading, and trailer parking. These assets serve logistics tenants and benefit from proximity to I-10, I-19, and Tucson International Airport.
Manufacturing Facilities: Buildings configured for production operations, including Raytheon suppliers, aerospace subcontractors, food processing, and consumer products manufacturing. Lenders evaluate the special-purpose nature of these facilities and the creditworthiness of the operating business.
Flex Space: Smaller buildings combining office and warehouse space, typically ranging from 5,000 to 30,000 square feet. Popular with defense contractors, technology companies, and service businesses throughout Tucson.
Cold Storage and Food Processing: Specialized facilities serving Tucson's growing food distribution and processing sector, including cross-border produce movement through Nogales.
Multi-Tenant Industrial Parks: Properties with multiple bays leased to small and mid-sized tenants. These assets provide diversified income streams and are popular with CMBS and bank lenders.
Foreign Trade Zone Facilities: Industrial buildings within designated FTZ areas near Tucson International Airport that allow duty deferral, reduction, or elimination on imported goods.
How Do You Underwrite a Tucson Industrial Loan?
Industrial loan underwriting in Tucson follows property-specific and borrower-specific evaluation criteria:
Property Metrics:
- Net Operating Income based on current leases and market rent comparables
- Tenant credit quality and lease term remaining (weighted average lease term is critical)
- Building functionality: clear height, column spacing, dock doors, trailer parking, power capacity
- Environmental condition (Phase I and potentially Phase II for older industrial sites)
- Proximity to transportation infrastructure (I-10, I-19, airport, rail)
Borrower Metrics:
- Credit score (typically 660+ for conventional, 580+ for some bridge programs)
- Net worth and liquidity requirements
- Industrial real estate experience
- Tax returns and financial statements (2 to 3 years)
Key Underwriting Ratios:
- DSCR of 1.25 to 1.40 for single-tenant industrial (higher for credit tenants)
- LTV of 65% to 75% for most programs
- Debt yield of 9% to 11% for CMBS and bridge programs
- Tenant concentration risk: lenders prefer no single tenant exceeding 30% to 40% of income in multi-tenant properties
Ready to finance your Tucson industrial property? Contact our lending team for a personalized rate quote and program recommendation.
What Is the Process for Securing a Tucson Industrial Loan?
The industrial loan process follows a structured path from initial evaluation through closing:
Timelines vary by program type. SBA 504 loans typically take 60 to 90 days, conventional bank loans 30 to 60 days, bridge loans 14 to 30 days, and CMBS loans 45 to 75 days. Construction loans require additional time for plan review and budget verification.
Frequently Asked Questions About Tucson Industrial Loans
What is the minimum down payment for an industrial loan in Tucson?
Down payments for Tucson industrial properties range from 10% to 35% depending on the loan program. The SBA 504 program offers the lowest entry at 10% for owner-occupied buildings. Conventional bank loans typically require 20% to 25%, while bridge and hard money loans may need 25% to 35% equity. Tucson's lower per-square-foot pricing compared to Phoenix means the absolute dollar amount of your down payment is often substantially less for comparable building sizes.
Can I finance a Foreign Trade Zone property in Tucson?
Yes. Industrial properties located within Tucson's Foreign Trade Zone near the airport are actively financed by national and regional lenders. FTZ designation can actually enhance loan underwriting because it attracts tenants involved in cross-border trade and manufacturing who benefit from duty deferral and reduction. Lenders evaluate FTZ properties similarly to other industrial assets, with particular attention to tenant quality and lease terms.
How does Tucson's proximity to the Mexico border affect industrial lending?
Tucson's location along the I-19 corridor to Nogales is generally viewed as a positive factor by lenders because it creates structural demand from nearshoring, cross-border logistics, and trade-related tenants. Properties that serve the U.S.-Mexico supply chain often have strong tenant demand and defensible lease rates. Lenders evaluate border-adjacent properties based on the same fundamentals as other industrial assets, with consideration for the specific tenant industries and trade dynamics driving occupancy.
What environmental due diligence is required for Tucson industrial loans?
All industrial loan programs require a Phase I Environmental Site Assessment, and older properties or sites with prior industrial use may require a Phase II investigation with soil and groundwater sampling. Tucson's history of mining, aerospace manufacturing, and military activity means environmental awareness is particularly important for industrial transactions. Lenders want to ensure there are no unresolved contamination issues that could affect property value or create liability.
Are industrial cap rates in Tucson stable or compressing?
Tucson industrial cap rates have been relatively stable through 2025, with slight expansion in speculative product and stability in tenant-occupied modern assets. Modern warehouse and distribution properties with credit tenants trade at approximately 6.0% to 7.0%, while value-add and older industrial assets offer higher yields of 7.0% to 8.5%. The increase in speculative supply has created more buyer-friendly conditions compared to the tight market of 2022 and 2023.
Can I get a construction loan for a new industrial building in Tucson?
Yes. Several national and regional lenders offer construction financing for industrial development in Tucson, particularly in the Airport submarket and Marana corridor where demand from logistics and manufacturing tenants is strongest. Construction loans typically require 30% to 40% equity, pre-leasing commitments (or strong market analysis for speculative development), and developer experience with similar projects. The $80 million I-10 International project demonstrates that institutional capital is actively flowing into Tucson industrial development.
Take the Next Step on Your Tucson Industrial Loan
Tucson's industrial market is being propelled by nearshoring demand, defense and aerospace growth, and the metro's strategic position on major trade corridors. Whether you are acquiring a warehouse near Tucson International Airport, building a distribution facility in the Marana corridor, or refinancing an existing industrial property to take advantage of favorable rates, having the right financing partner is essential.
Contact Clear House Lending today to discuss your Tucson industrial financing needs. Our team specializes in matching industrial borrowers with the right loan program, from SBA and conventional options to bridge, CMBS, and construction solutions, so you can move forward with confidence in Southern Arizona's growing industrial market.
Market data sourced from Cushman and Wakefield Tucson Industrial MarketBeats Q3 2025, Commercial Real Estate Group of Tucson Industrial Market Outlook 2026, Lincoln Property Company I-10 International Project Data, PICOR Tucson Industrial Reports, and Select Commercial Mortgage Rate Data.