George Condon, Partner, Dermody Properties West Region Office, authored one of the most recent Nevada market reports for Western Real Estate Business.
Las Vegas and the Greater Nevada region are showcasing their business-friendly climates now that the Great Recession is in their rearview mirror.
The Las Vegas economy is returning from the depths of the Great Recession and bringing its industrial market with it. There are several drivers behind the economy’s current growth: tourism, casino/resort development, residential demand, its proximity to California and Nevada’s probusiness stance.
Tourism has returned to record levels. Casino/resort development is occurring again. The residential housing market is fnally stabilizing, sparking demand for new housing. Companies are looking at Las Vegas and Nevada, as a whole, as an alternative to California for distribution, especially ecommerce centers and manufacturing.
The pro-business message conveyed by state and local officials and economic development agencies is paying dividends, and local firms like Dermody Properties are doing all we can to support this statewide effort to attract new companies to Nevada.
Las Vegas is close to one of the nation’s largest consumer bases, Southern California, which includes the ports of Long Beach and Los Angeles. Interstate 15 provides excellent access to Southern California and Utah within one day’s truck drive. Additionally, linking Interstate 11 to Phoenix will open other industrial opportunities for Las Vegas.
Nevada’s attraction also includes the state’s benefcial tax structure and ready and able workforce. Companies that need to invest large amounts of capital in their buildings for manufacturing or complex picking and handling systems, or those that need large workforces have found a home here.
Las Vegas is also a wise investment choice for pension fund investors who seek higher returns for investment grade buildings than what they can achieve in Southern California.
Dermody has been a very active investor and developer in Las Vegas since 1974, and remains optimistic about the region. For example, Dermody’s LogistiCenter at Cheyenne was almost 40 percent leased before its walls were even up.
These factors have sparked new demand for industrial space, according to statistics from United Construction Company, a national frm based in Nevada that has been active in Las Vegas for decades.
As is the case when markets correct, Las Vegas is lacking larger spaces available for lease. Significant statistics include:
• The industrial vacancy rate is at 5.8 percent, the lowest since the third quarter of 2007.
• Absorption in the second quarter of 2015 was 1.6 million square feet, the highest since the second quarter of 2008.
• Absorption in the first and second quarters of 2015 exceeded absorption for all of 2014.
Dermody Properties is forecasting a strong year for the Las Vegas industrial market that will lead to new construction, lower vacancy rates, and higher rents and building values.
Read the the full article in Western Real Estate Business on page 22.