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A lot of land
earmarked industrial was purchased & converted to single family use
in the last 5 years.
An astonishing 3.3 million square feet of industrial space is
presently under construction to make a total base of about 83
million SF in the market to date.
Space is in high demand and good locations demand premium pricing
and lease up quickly.
Due
to current demand, the process for permit approval is more prolonged
than in previous years. What used to take two to four weeks now
takes seven to nine months. This hindrance, combined with escalating
land prices and construction costs, continues to hold back some new
projects from entering the market.
New Las Vegas industrial product is being absorbed as soon as it
becomes available, pushing vacancy rates down to new lows.
Overall vacancy rates remain at about 4.84%
This record low vacancy is indicative of the continued strong
demand and supply constrains being faced in the metro Las Vegas
Industrial market in 2005. Industrial product continues to be
sought after by firms looking to redevelop properties to “higher and
better uses”. Land prices and building materials have showed no
signs of retreat, which is forcing developers to rethink the way to
meet the demands of the industrial market.
Experienced developers are designing and
developing
new and creative types of product, designed to command higher rents
such as mixed use office/industrial property to multi-tenant
industrial condos.
Most of the
remaining industrial land in the valley can be found either in the
Southwest along the I-215 - along Blue Diamond road, or in
the Northeast around the
Las
Vegas Motor Speedway
and in the vicinity of Nellis AFB .
The demand for
industrial space is high partially due to strong manufacturing growth of 1,500 new jobs over the past year.
Las Vegas
is proving to be a very strategically important location for
distributors throughout the United States.
The
area’s attractive business climate, strong local economy and
favorable tax laws will continue to attract businesses. The
Las Vegas
industrial market is expected to remain healthy for the foreseeable
future as we begin the predicted 5 year construction boom on the
strip. Expect supply to be tight and industrial rents to
continue to rise. |
