Las Vegas feels industrial squeeze
The amount of available inventory in the industrial market is rapidly diminishing and future supply could be constrained because of land and construction prices, industry experts said.
Vacancy rates for the industrial market continued to drop in the fourth quarter, indicating a high-demand, supply-constrained market and a market that could face challenges going forward, local brokers said.
The valleywide industrial vacancy rate settled near 4 percent at the end of 2005, although numbers vary between firms because of the research methods used. Researchers at Grubb & Ellis went so far as to say that industrial development in Las Vegas is on the brink of extinction as future projects continue to deplete an already shrinking industrial land supply.
In the fourth quarter 2005, asking rents were 66 cents per square foot (not accounting for operating expenses) compared to 57 cents during the fourth quarter 2004, reported John Restrepo, principal at Restrepo Consulting Group.
A continued challenge to industrial users is finding space — especially when that space is being bought up with intentions of grander plans, such as a condominium or mixed-use development.
Market experts point out there is a healthy amount of for-sale industrial product in the construction pipeline, but limited for-lease distribution space exists.
“While the spec industrial market remains strong, we are definitely monitoring the amount of investment in the for-sale industrial market and rapid land costs because of their potential impacts to our for-lease market,ยจ said Vic Donovan, managing partner at Colliers International, Las Vegas.
Source: In Business Las Vegas