Utilities & Property Costs

Southern Arizona is served by a number of organizations, both public and private, that provide basic utilities and services to local residents. Utilities are regulated by the Arizona Corporation Commission. Most of the water utilities are regulated by the Arizona Department of Water Resource and their respective elected bodies.
 

Natural Gas

Southwest Gas - covers Pima and Cochise Counties and most of Pinal County

Residential $22.29
Commercial $8.62
Industrial $6.02
Dollars per Thousand Cubic Feet
Source: US Energy Information Administration, August 2016


Electric Rates

The commercial and industrial electric rates are consistently lower than the national average and businesses of all kinds can profit from these savings. Energy-intensive businesses, such as data centers, especially benefit from TEP’s low energy costs and high reliability. The chart below shows examples of demand and usage, with corresponding rates and monthly bills. Tucson Electric Power covers, Ft. Huachuca, most of Pima County and all of Santa Cruz County. Sulphur Springs Valley Electric Cooperative covers much of Cochise County.
 

500 kW, 180,000 kWh    
  $/kWh Monthly Bill
US Average $0.107 $19,285
Tucson Electric Power $0.098 $17,715
Arizona Public Service $0.099 $17,840

1,000 kW, 650,000 kWh    
  $/kWh Monthly Bill
US Average $0.086 $55,814
Tucson Electric Power $0.076 $49,664
Arizona Public Service (E-32 Large Primary) $0.071 $46,399

50,000 kW, 32.5 Million kWh    
  $/kWh Monthly Bill
US Average $0,079 $2,579,292
Tucson Electric Power $0.071 $2,313,310
Arizona Public Service (E-32 Large Primary) $0.068 $2,221,491

Source: Edison Electric Institute Typical Bills and Average Rates Report Summer 2015


Water

Industrial & Commercial Rates - Tucson MSA

Charge Charge per Ccf
Usage Base Rate $2.60 (industrial) $2.64 (commercial)
Tier 1 Summer Surcharge $1.00
Tier 2 Summer Surcharge $0.27
Central Arizona Project (CAP) $0.65
Conservation Fee $0.08

Per 100 cubic feet (Ccf) (1 Ccf = 748 Gallons)
Source: https://www.tucsonaz.gov/water/rates-and-monthly-charges/industrial

Water conservation

Tucsonans can be justifiably proud of their national leadership in effective use of water. Tucson Water has encouraged water conservation for more than three decades, and as a result Tucson has one of the lowest per capita water usage rates in the southwestern United States. Strengthening our conservation ethic is a key strategy in ensuring our future sustainability.
 
Wise use of all these water resources requires planning. Tucson Water has developed a Long Range Water Resources Plan which provides a comprehensive look at Tucson's future water supply requirements. Using the plan as a guideline allows the community to implement projects and programs that will provide adequate water supplies to meet the needs of future generations. The region also has access to Colorado River water, which is imported via the Central Arizona Project. This renewable resource will, over time, largely replace groundwater as Tucson's primary drinking water supply.
 

Property Statistics

Average Land Cost per Acre

Submarket Overall Weighted Average Price
(per square foot)
Airport $2.00 - $2.75
Oro Valley $4.00 - $10.00
Northwest $2.75 - $4.00
Southeast $1.50 - $2.50
South Central (Palo Verde/Ajo) $2.75 - $3.75
Source: PICOR - A Member of the Cushman & Wakefield Alliance

Average Commercial/Industrial Lease Rates

Market Type Overall Weighted Average Net Rent
(per square foot)
Warehouse/Distribution $0.49
Manufacturing $0.49
Office Service/Flex $0.55
High-Tech $0.76
Class Type Overall Average Asking Rent (per square foot)
Class A $23.72
Class B $16.15
Class C $14.15
Source: PICOR - A Member of the Cushman & Wakefield Alliance

Vacancy Rates

Sector 2014 2015 2016 2017
Industrial 10.6% 9.1% 7.8% 7.4%
Office 12.6% 12.8% 11.0% 9.9%
Retail 6.7% 6.6% 6.4% 6.4%
Land (total permits issued) 2,898 2,863 2,928  
Source: CoStar; PICOR - A Member of the Cushman & Wakefield Alliance
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