Terry D. Barone

 Downturn in Industrial Properties Continue

Vegas will always be in play.  Businesses still want and need to be in Las Vegas to take advantage of our geographic location, tax and business incentives, while servicing our expanding population and infrastructure needs. That said, no one is lining up for the vacant industrial spaces that at one time were going at a premium.

Prices have dropped.  As for industrial real estate prices and lease rates, Prices have dropped as they have in other real estate segments. Sellers, two years ago were asking exaggerated prices for their assets,however, today are very anxious to make deals including carrying back a note and offering lease incentives including shorter leases.

Overall vacancy rates rose from 4.84% in 2006 to over 11% in 2009.  Lease rates have declined and industrial development has come to a standstill.  Landlords are trying to entice tenants with generous improvement allowances, and reductions in lease rates.

Smaller spaces lease first.  Small space is still leasing well in part because companies are downsizing from larger spaces. Leases are shorter term and companies are subletting space when they can.

Las Vegas has proven to be a very strategically important location for distributors throughout the United States.  The demand for industrial space has always been due to steady manufacturing growth.  There are not a lot of companies expanding right now and if they are not already here, they are waiting for the economy to improve before they consider a move to Las Vegas.

Attractive business climate.  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 rebound in the near foreseeable future just as the rest of the economy improves and rents to once again, increase.

We work closely with many of the top  builders and developers locally specializing in industrial space.  As an investor, buyer or tenant – we are here to represent your interest in the location of property tailored to your needs and represent you in the transaction including providing you detailed comps so you can not only learn the market but compete!