The Low Down on Industrial Space
The industrial market in Southern Nevada has reached a 3.4% vacancy rate, which is near the all-time-record low of 3.3% noted earlier this year. According to Applied Analysis, the Las Vegas Valley’s industrial inventory grew to 2,733 buildings, totaling 87.5 million square feet, in the third quarter of 2006. Roughly 5 million square feet worth of additional industrial space was under construction in the third quarter, including DP Partners’ 513,240-square-foot addition to its LogistiCenter development.
Demand and a low supply are pushing prices upwards as well. Asking rents averaged $.74/ per square foot in third quarter, which is $.11 more than a year ago. However, the increase, may not be enough to offset the rate of inflation and the project challenges that developers now face. Land-supply shortage, rising construction prices, lengthier permitting times and tougher financing are becoming hefty obstacles for developers to overcome.