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Industrial SummaryFourth Quarter 2023

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Northern Nevada

By Angel Orozco, CBRE

The Reno industrial market was comprised of approximately 112 million SF at the close of Q4 2023. The market substantially grew in 2023, adding over 7.3 million SF of new inventory across 25 buildings. The construction pipeline remained plentiful, with a variety of projects totaling over 2.5 million SF underway and 16.1 million SF in various planning stages.

The overall average asking lease rates closed Q4 2023 at $0.89 NNN. West Reno and South Reno posted the highest average asking rates at $1.11 NNN and $1.08 NNN, respectively. The vacancy and availability rates rose quarter-over-quarter (QoQ) to 4.2 and 6.5 percent, respectively. The East Valley submarket continued to be one of the most active submarkets in Reno, which delivered over 5.1 million SF of new product and experienced over 3.8 million SF of net absorption in 2023.

The industrial tenant demand remained stable in Q4 2023 with increased demand by consumer product users. Multiple leases and sales over 100,000 SF were signed at the close of 2023 as noted in the top leases and sales. Q4 2023 also witnessed a resurgence of activity for users under 100,000 SF after two quarters of reduced demand. The Reno market totaled 810,000 SF of net absorption, maintaining the market’s ongoing robust occupancy growth.

Southern Nevada

By Laura Wilhelm and Garrett Toft, CBRE

The Las Vegas industrial market closed 2023 on a strong note. The market posted 2.7 million sq. ft. of positive net absorption in Q4 2023, driving the year-to-date total to 8.1 million sq. ft., the third-highest in the market’s history. This annual total is 9.6% higher than that for 2022.

During Q4 2023, 4.1 million sq. ft. was delivered to the market, bringing the total for the year to 11.3 million sq. ft. and setting a market record for the most deliveries in a year. Preleasing in deliveries this quarter was 71.3%. Currently, there is 17.4 million sq. ft. under construction, and preleasing stands at 15.1%.

As predicted, with the delivery of about 1.2 million sq. ft. of vacant space during Q4, the overall vacancy rate increased 70 basis points from last quarter, from 2.5% to 3.2%. This marks the highest rate since the COVID-19 pandemic, when it reached 3.8% during Q1 2021.

Tenant demand remained strong throughout 2023 and began accelerating into the last quarter. Tenants continue to relocate and expand in Las Vegas to service the region. If the current pace of leasing continues, the market can avoid a situation of oversupply in 2024.