Harsch Builds Tucson’s First Industrial Spec Project in 10+ Years

By David Pittman

Harsch Investment Properties, a Portland-based firm, has completed a 157,500-square-foot, multi-tenant building near Tucson International Airport (TUS). The building provides greatly needed speculative industrial space for companies looking to relocate or expand here.

Located at the Tucson Airport Distribution Center, the building is the first large spec commercial real estate project built in metro Tucson since 2009. With easy access to I-10, I-19, TUS and the Port of Tucson, the site is ideal for companies in the distribution, fulfillment and logistics industries. If the project proves successful, it could bring increased spec commercial real estate investment to Tucson.

“We are big believers in Tucson and Southern Arizona as a strategic location to continue to grow our business,” said Jordan Schnitzer, Harsch’s president. “Tucson has great success with attracting new businesses and this speculative building will continue to push the region forward as a leader in distribution and logistics operations.”

Harsch owns and operates 26 million square feet of office, industrial, multi-family and retail properties in six western states, but is a relative newcomer to Southern Arizona. Just five years ago, the firm began purchasing property and has already established a strong presence. 

With the 2019 acquisition of Medina Business Park near Valencia Road and Tucson Boulevard and the completion of the new spec building, Harsch owns more than 657,200 square feet of commercial real estate in Tucson. 

Pima County Supervisor Ramón Valadez called Harsch’s growing influence here “incredibly exciting” and said the company “is in discussions with Pima County” to assist in developing the Aerospace Research Campus south of Raytheon. 

“Pima County is committed to attracting and fostering high-wage employment, and major industrial real estate investment firms like Harsch are a vital, if not key, component, in that effort,” said Valadez. “I look forward to more announcements from Harsch and congratulate them on their expansion near (Tucson International Airport).”

The new building is the second built at Tucson Airport Distribution Center. The first is a 113,000-square-foot structure constructed by the center’s previous owner, the Rockefeller Group. Harsch Investment Properties executives expect the majority of the building to be occupied soon.

“With the exception of our newest building, virtually all of our Tucson industrial sites are leased,” said Bill Rodewald, Harsch’s senior VP and regional manager. “We haven’t leased any space in the new building yet, but we’re negotiating with four different industrial businesses, and if each one becomes a tenant it would fill more than 80% of the property.”

After the new building is filled, Rodewald said, Harsch will begin construction of another industrial spec project on 24 acres near Elvira and Country Club roads. “We already have architects working on the drawings for that project,” he said.

Rodewald said Harsch officials have been “extremely impressed” by the collaborative nature exhibited between the Tucson business community, the city, the county and such organizations as Sun Corridor Inc. and Metropolitan Pima Alliance to encourage economic development. “Business and government leaders here have been very encouraging and helpful to us,” he said.

In March 2017, the Site Selectors Guild brought its annual conference to Tucson for the first time, which proved to be very favorable for both Tucson and Sun Corridor Inc., Southern Arizona’s go-to economic development organization. However, those site selectors said one of Tucson’s biggest economic development shortcomings was a severe shortage of high-quality industrial space suitable for companies looking to relocate here immediately.

David Welch, executive VP of Sun Corridor Inc., described the Harsch spec building as a big first step in addressing that problem.

“Leasing interest in the building is strong, which is very encouraging,” Welch said. “If it can get leased quickly, it’s a good indicator that more spec space is warranted and will provide an incentive for other developers to invest in Tucson and Southern Arizona.” 

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