Ravaged —The Las Vegas Industrial Sector

What happened??
In one word: Politics

Never before have we seen such a difference in the supply and demand equilibrium as we have in the Las Vegas Industrial Sector. Beginning around the start of the China virus from 2020-Present, leasing rates are up approximately 70% (and climbing). Inventory is at an all-time low and developers have fully leased Industrial Parks that currently consist of nothing more than dirt and renderings. Small flex space units (units that contain both office and warehouse space) have been hit the hardest. What was once for lease at $0.80 per square foot is now getting rented for $1.50 per square foot with multiple offers. 

Right now, it’s the Landlords and Owners that are calling the shots. 

The vetting of potential Tenants and meticulously selecting the type of business, has gotten more extensive. Rent negotiability is futile. Tenant Improvements and rent abatement? LOL good luck. There is just so much demand for these small spaces and the pickings are slim. With standard Lease terms now sitting at 5+ years, potential Tenants are experiencing the frustration of having to wait, scour for properties professionally unrepresented or hope for call backs regarding existing Tenants not renewing their Leases. Not to mention finding a property in a desired area and containing the appropriate zoning for your use. 

And why? Politics, of course! 

Approximately 1/3rd of all Industrial Leasing, that we have seen, has been from companies fleeing neighboring States with tyrannical Governments and ridiculous tax structures. Take California for example. How else could you justify signing a 10 year Lease on a 10,000 square foot warehouse via FaceTime? Why would anyone do that? Because it’s still considerably cheaper. They are able to Lease a 10,000 square foot warehouse, in Las Vegas, for the same price they are paying for 5,000 square feet in CA. 

But, this is Commercial Real Estate in Las Vegas. Markets re-bound. The balance is eventually restored and life goes on. If you are looking for a small warehouse or flex space and it works for your business, do not hesitate. This is not the time for window shopping and certainly not the best time to be a start-up auto mechanic looking for space. My best advice? Find a Brokerage that you enjoy dealing with and a Brokerage that keeps a constant eye on the market for available spaces for sale and for lease. Find a Broker that has its finger on the pulse of off-market properties and dense co-Broker communication. That Broker will give you the edge on finding you your dream location so your business can thrive. And that’s it. Call us, we’d love to assist you: 702-480-2403