Northern Nevada
By Angel Orozco and Garrett Shutt, CBRE
The Reno Industrial market has experienced exponential growth throughout 2021. The region has consistently been a target for large corporate manufacturing and distribution sites, but the pandemic has sky rocketed demand with no signs of stopping. The lack of Class A and B product in the market, led to a rise in pre-leasing activity. New transaction volume totaled 8.2 million SF in 2021, up from 6.5 million SF in 2020. New constructions deliveries totaled just over 4.6 million for the year and anticipates another 3.4 million in development in 2022.
Vacancy and availability rates reached record lows in Q4 2021. Vacancy decreased 30 bps quarter-over-quarter, finishing the year at 1.8 percent. Average asking lease rates increased 12.7 percent year-over-year. Leasing velocity continued to soar leading to 3.5 million SF of net absorption in Q4 2021, bringing the year-end total to 7.1 million, the highest amount of occupancy gains on record.
Last year saw the highest completion deliveries on record with 4.6 million SF of new product added to the market. The construction pipeline remained robust in Q4 2021 with 3.4 million SF of developments currently underway. Strong demand and subsequent leasing of new construction will continue to produce exceptional market growth fundamentals into 2022.
Southern Nevada
By Cassie Catania-HSU, CBRE
Last year was the strongest year on record for the Las Vegas industrial market. It recorded 2.4 million SF of positive net absorption for Q4 2021, closing out 2021 with a record-high yearly total of 10.5 million SF. The direct vacancy rate further decreased, from 2.4 percent last quarter to a record-low of 1.5 percent in Q4 2021, while the monthly average asking lease rate increased by nearly 9 percent quarter-over-quarter and 30.7 percent year-over-year.
The North Las Vegas submarket accounted for half of the total absorption, a large part of which occurred in recently-delivered vacant spaces. The continually expanding Henderson submarket accounted for nearly one-third of the absorption.
Over 1.1 million SF of projects were completed during Q4 2021, nearly 80 percent of which were preleased. While most new construction has been heavily concentrated in the North Las Vegas submarket over the past several years, the majority of Q4 2021 completions occurred in the Henderson submarket.
About three-fourths of space under construction was speculative development, and nearly one-fourth was preleased. With the large number of projects underway during Q4 2021, combined with a measurable rise in planned projects, the industrial market is well-positioned for continued growth and development through 2022 and beyond.