As of the end of the 4th Quarter 2009, the overall vacancy rate for the Las Vegas industrial market was approximately 14.5% according to Colliers International – Las Vegas, NV*. Vacancy rates and market rental rates vary significantly between various industrial property types which include: Warehouse/Distribution, Light Distribution, Light Industrial, Incubator, and Flex. Average market rental rates range from $0.47/s.f. NNN for Warehouse/Distribution space to $0.97/s.f. NNN for Flex space.

Las Vegas’ central location to major cities in the Southwest makes it a strong market for major warehousing and distribution facilities. Warehouse/Distribution product is generally regarded as one of the strongest performing property types in the Las Vegas Valley and reported an overall vacancy rate of 10.2% for over 45 million square feet of reported space. The Valley’s two largest warehouse/distributions submarkets (North Las Vegas and Southwest) have continued to perform well, each reporting less than 10% vacancy. Although distribution space has been relatively stable, other industrial property types have not fared as well during the current economic downturn. Flex industrial projects have been the hardest hit and reported a 27.1% vacancy rate at the end of the 4th quarter. This is largely due to small business owners struggling from a lack of consumer spending as well as taking losses on their retirement funds and savings which support many small operations.

The steep rise in land values in the years preceding the current recession caused fear throughout the Las Vegas Valley that we would run out developable industrial land. Now, due to the significant drop in land values, industrial development may become more viable. Overall, the industrial market is faring well compared to other areas in the southwest region. We expect struggling aspects of the industrial market to quickly recover following the current economic recession.

*Colliers International – Las Vegas, NV Fourth Quarter 2009 Industrial Review