As of the end of the 1st Quarter 2011, the overall vacancy rate for the Las Vegas industrial market was approximately 15.8% 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 $0.4/s.f. NNN for Warehouse/Distribution space to $0.87/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 13.4% for over 45 million square feet of reported space. Overall industrial vacancy rates have particularly been driven upwards by Light Distribution and Flex properties throughout the valley. These two property types exhibit vacancy rates north of 20%. Warehouse/Distribution was the only product type to experience positive net absorption in the 1st Quarter.

The silver lining in the industrial market continues to be the gradual easing of the rapid increase in vacancy and negative absorption experienced from 2008 to 2010. We have observed a direct correlation in the easing of overall employment losses and the easing of negative absorption levels. We expect these trends to continue until we see an increase in industrial employment which will stem from overall gains in the tourism industry. Much of the valley’s Light Industrial and Light Distribution product (which has struggled significantly) previously supported Las Vegas Strip properties. With the new affordability of industrial product, we believe the industrial market will be well poised for a strong rebound following the “Great Recession”.

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