TUCSON-While its big city neighbor to the west, Phoenix, is experiencing significant industrial demand, Tucson’s industrial market continues to struggle, according to CBRE’s second quarter market report.

“Part of the reason why Phoenix is doing so much better than Tucson is the availability of newer space,” says Tim Healy, a broker with CBRE’s local office. “During the last development cycle, we didn’t see a lot of development, so when companies are looking for larger, newer industrial space, we don’t have it. Our building stock is dated.”

During the second quarter, the industrial market vacancy rate increased for the second time in 2011, rising to 11.3%, according to CBRE. However, the vacancy rate is still lower than one year ago when the rate was 11.8%.