X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.

LAS VEGAS-The overall industrial vacancy rate rose to 8.3% in the market during the third quarter, according to a report by the LasVegas office of Grubb & Ellis. Vacancy rates in submarkets were all over the map.

The tiny South submarket, with only 758,000 sf of space, had a zero vacancy rate. The Henderson market, with 11.44 million sf of space, posts the highest vacancy rate at 14.9%. Henderson and Northeast, which has 5.6 million sf of space and a vacancy rate of 11.2%, were especially it hard by a slowing national economy, weakened demand for warehouse space and the loss of absorption from telecom companies, Grubb & Ellis notes.

“The events of Sept. 11 have had the effect of delaying expansion plans and new projects for marginal-credit clients,” the report warns. “Lenders have adopted a very conservative stance and are focusing on properties with proven track records.”

Plans by established developers such as Dermody Properties, MajesticRealty Co. and the Airport Authority, will continue, the report notes. Also unaffected is EJM Development’s 150-acre proposed project offInterstate 215 in the Rainbow area, Grubb & Ellis adds.

Patrick Foley, senior industrial advisor at Grubb & Ellis, says it isdifficult to forecast when lenders will loosen their purse strings forindustrial properties. But he is confident a correction will occur.

“It will correct,” Foley says. “It may take a year to overcome it, butit will. The market’s too strong here.”

Meanwhile, bad news for developers is good news for prospective tenants.

“Larger concessions are being offered to lure hesitant clients in thisweakening market,” Grubb & Ellis notes. “On a five-year lease, it is now typical to receive a minimum of three months free rent, with some tenants receiving up to five. In a stronger economy, one to two months is more common.”

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 3 free articles* across the ALM subscription network every 30 days
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?

Dig Deeper

GlobeSt. NET LEASE 2020Event

This conference brings together the industry's most influential & knowledgeable real estate executives from the net lease sector.

Get More Information
 

GlobeSt

Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2020 ALM Media Properties, LLC. All Rights Reserved.