Industrial Development Ramps up Near Vegas

SOUTHERN NEVADA—After five years of no speculative development, the Southern Nevada region now has more than 4.6 million square feet of planned industrial buildings, according to Colliers International. The first to break ground was a 464,000-square-foot project in North Las Vegas by Prologis, with several others due to break ground in the next few months.

Dan Doherty, EVP of Doherty Industrial Group at Colliers International in Las Vegas, tells GlobeSt.com, “Our industrial market has made a major turnaround over the last 12 months.” We spoke with Doherty about the recovery and where he sees the market heading.

GlobeSt.com: What has led to the recovery of the industrial development market in Southern Nevada?

Doherty: It has been close to six years since a single speculative industrial building has been built in the Las Vegas Valley. This has forced our growing demand from local and regional users to seek relief through built-to-suit projects or pursue existing vacant industrial space in the valley. Net absorption stands at almost 2.7 million square feet through the third quarter of this year and is expected to break 3 million square feet by the end of the year. Along with an increase in local demand as our economy continues to improve, we are also seeing new and much larger requirements from the western region and the entire US.

GlobeSt.com: What types of businesses have been and are expected to fill the space being built?

Doherty: Business types include third-party logistics companies, Internet-based retailers or e-commerce, commercial printers, household-goods distribution, gaming and resort companies, beverage bottling and distribution, pharmaceutical manufacturing and distributing, trade-show manufacturing and storage, and solar manufacturing and storage.

GlobeSt.com: What is the overall size/type of industrial product being planned?

Doherty: Speculative buildings range in size from 105,000 square feet up to our largest building currently under construction of 464,000 square feet by Prologis in North Las Vegas. Dermody Properties will be breaking ground in December on a 381,000-square-foot facility also in North Las Vegas, and Panattoni Development is breaking ground early next year on two 200,000-square-foot buildings near the Las Vegas Strip.

GlobeSt.com: In what geographic area of Southern Nevada is most of the development taking place?

Doherty: Most of the new development is taking place in the north, specifically North Las Vegas. This is the location of the least-expensive industrial land in the valley (average $4.50 per square foot) and the location where most of the larger parcels are located. Henderson in the southeast portion of the valley is also going to see significant new development as well.