From CBRE Reno
The industrial market in northern Nevada continued to build on its momentum from the previous year by again reporting strong market fundamentals in the first quarter of 2021. Gross absorption for the quarter reached 1.9 million square feet (SF). Net absorption was also robust, posting a positive 1.3 million SF. Low vacancy rates have led to substantial increases in asking rents as both bulk and flex asking rates have risen.
Rental activity is booming across the region, with SF 2.9 million leases signed. Large deals remain an integral part of the industrial market as the largest lease of the quarter was a pre-lease for a new build with an undisclosed company at Reno Logistics Center (795,926 SF). The market is still seeing significant capital inflows into the region as the largest sales for the quarter were investment deals. The largest sale of the first quarter of 2021 (447,122 SF) took place in the North Valleys submarket when Industrial Realty Group acquired the property as part of a bankruptcy sale from LSC Communications.
The construction pipeline grew during the quarter with SF 1.3 million of new projects starting construction in the first quarter of 2021. This brings the total area of ââproperties currently under construction to SF 4.2 million, the highest figure ever recorded in the northern Nevada‘s industrial market. It is expected that continued tenant demand will continue to result in strong market fundamentals throughout the year.
From CBRE Las Vegas
In the first quarter of 2021, the Las Vegas industrial market continued its positive momentum with net absorption of more than 2.4 million SF, the highest quarterly level since the fourth quarter of 2017. Las Vegas is within a one-day truck ride to most major markets West Coast and Southwest, continuing to attract a number of e-commerce and other logistics companies setting up regional sales offices. Manufacturing companies were also active. Employment in manufacturing has increased by 10 percent since April 2020.
One of the significant transactions in the first quarter was the leasing of DHL Express in 385,251 SF in the Raceway Industrial Park. Winco has also rented 189,785 SF at the Marion Logistics Center.
At the end of the first quarter, SF 8.5 million of industrial space was under construction, almost half of which was pre-released. The North Las Vegas and Henderson submarkets account for almost 90 percent of the total area under construction. New build completions in the first quarter totaled almost SF 700,000. The Las Vegas industrial market is one of the fastest growing markets in the country, and based on reports from CBRE brokers, there is no sign of any slowdown in expansion.