Industrial Market Remains Strong…For Now
According to a recent GlobeSt article, the industrial market in Las Vegas remains strong. The local market added over three million sf through the first half of the year and has already absorbed 2.3 million sf, keeping overall vacancy in the low single digits. For the near-future, the market is expected to continue to perform, with increasing demand largely keeping pace with a surge of new construction. However, the long-term outlooks does not bode well. The market is running out of industrial zoned land for warehouse; and distribution space is priced such that achievable rents can not provide a reasonable return on investment.
According to a report released by Applied Analysis, “as of June 30, the industrial market consisted of 85.9 million sf in 2,705 buildings with unoccupied space totaling 3.4 million sf, for a vacancy rate of 4%, up temporarily from a record-low 3.2% at the end of the first quarter. Despite three million sf already have been added during the first six months of the year–1.6 million sf in the second quarter, by itself is more than half of last year’s total–approximately five million sf of industrial space is under construction. An additional 6.6 million sf is planned but has yet to commence construction.”