Northern Nevada
By Grant Bollinger, CBRE | Reno
The Reno industrial market was comprised of approximately 116 million sq. ft. at the close of Q1 2025. There were three new industrial buildings delivered to the market in Q1 2025, totaling 600,000 sq. ft. The construction pipeline had 1.5 million sq. ft. underway with another 15.9 million sq. ft. in various planning stages. The overall average asking lease rate at the end of the quarter was $0.81 NNN. The Central/Airport and South Reno posted the highest average asking rates at $0.98 NNN and $1.03 NNN, respectively.
During Q1 2025, the overall vacancy rate decreased to 11.5%, while the availability rate decreased to 13.0%. Notably, this quarter marked the first instance of positive net absorption since 2023. Sublease space continued to flow into the market, which represented 1.3 million sq. ft. of the total available space in Q1 2025. Q1 2025 boasted a large increase in overall transactions with sublease space spearheading that growth. East Valley continued to be a hotbed for many industrial users, as it recorded 1.1 million sq. ft. of absorption.
The market is expected to continue experiencing an upswing in tenant demand indicative of the increased number of letters of intent, RFPs and lease activity at the end of Q1 2025. Institutional owner interest in the region will persist, and sales activity is expected to increase throughout 2025.
Southern Nevada
By Laura Wilhelm and Garrett Toft, CBRE | Las Vegas
Despite fluctuating market conditions, consistent leasing activity ensured that positive net absorption continued into Q1 2025, with nearly 604,000 sq. ft. of incremental space occupied. Over the past several quarters, a surge in new supply caused a shift in the supply/demand curve in the industrial market. This has led to a decade-high vacancy rate, which increased by another 40 basis points quarter-over-quarter to 9.5% in Q1 2025.
Q1 2025 saw an additional 1.5 million sq. ft. added to the market, bringing the total inventory to nearly 180.0 million sq. ft. Over the past five years, the market has seen a record-breaking influx of nearly 50.0 million sq. ft. of new projects.
At its peak in Q3 2023, the construction pipeline was nearly 20.0 million sq. ft. However, approximately one-fourth of this recently delivered space remains unoccupied, and developers are increasingly prioritizing leasing vacant space to maintain occupancy rates and to help stabilize the market. As such, the construction pipeline is currently at 7.7 million sq. ft. with about 43.0% preleased.
