Land for apartments is selling at $3 per sf , or $130,000 an acre, while commercial corners in high traffic areas are selling for $13 to $20 per sf, as much as $870,000 per acre, says Richard Foerster, a broker with Tucson Realty & Trust Co.

The population increase isn't going to abate, he says, and the prices for land will only continue to increase in the coming decade.

Rising land prices, along with new upscale developments and low vacancy have driven down vacancy rates for commercial space.

In the retail sector, lease rates have recently climbed to between $9.50 per sf to $12 per sf on Tucson's east and southeast areas, while space on the city's north and northeast submarkets is going for between $25 per sf and $30 per sf. New developments and refurbished existing retail locations, along with increased demand, are pushing rental rates upward.

In the office market, the overall vacancy rate is about 7%, a level maintained through all of 2000, but the tight supply is causing rates to escalate, according to Michael Gross, a Tucson Realty & Trust broker. The average lease rate for class A space in Tucson is approximately $22 per sf to $25 per sf, he says. With little new development on the horizon, he expects the vacancy level to remain steady throughout 2001 and rates to climb slightly.