— By Amy Ogden, Partner, Industrial, LOGIC Commercial Real Estate —
With the presidential election barely in our rearview mirror, many are taking a moment to assess how the outcome might impact (positively or negatively) their operations. On the one hand, this has been a resilient year for Las Vegas’ industrial market, which tracked close to 4.5 million square feet of net absorption. On the other hand, we are beginning to see a slowdown in momentum.
The uncertainty of potential changes has left decision-makers hesitant, preferring to avoid any premature moves until after the holiday season. Nevertheless, the market is far from idle. The recent rate cut of 50 basis points, along with expectations of an additional reduction at the upcoming November meeting , has set a quiet hum of activity in motion. Investors and key players are discreetly exploring opportunities, positioning themselves strategically for when the time is right to act.
Local industrial vacancy rates have also jump to about 7 percent as an influx of new deliveries come online. Vacancy rates are projected to hit double digits, considering an additional 4 million square feet is expected to deliver by year’s end. This is something we haven’t seen within the past 10 years.
Las Vegas has additionally shifted into a tenant-friendly market. Developers and landlords have become increasingly competitive and creative as they attempt to secure the deals that are out there. There are currently around 55 existing or nearly completed facilities that feature more than 100,000 square feet. Nearly half of this supply is marketed as divisible. This is in stark contrast to previous years when landlords were unwilling to break up their big boxes to accommodate tenants of less than 100,000 square feet.
As we head into the final stretch of 2024, the market remains in a state of cautious anticipation. Insightful investors and tenants are readying themselves for a market positioned for change with increased flexibility from landlords and potential rate cuts on the horizon. The coming months will be pivotal. Those ready to act when the time is right will find themselves well ahead in an evolving landscape.
This article was originally published in the November 2024 issue of Western Real Estate Business.