Sean Zaher / CBRE
The North Las Vegas Submarket is the largest submarket in the Las Vegas Valley consisting of roughly 51 million SF total, 37% of the overall market, and 60% of distribution product valley-wide as the epicenter of industrial logistics for Southern Nevada. As of Q2 2020, the vacancy rate is 5.30%, which is down 80 bps from Q1 2020 and 110 bps from Q4 2019.
Development is strong with 3.5 million SF under construction and over 6.2 million SF of planned product, with only a few planned projects delayed due to COVID-19. Active big box developers in North Las Vegas are Prologis, Clarion, Panattoni, Trammel Crow, CapRock, and Becknell, who continue to meet demand for 250,000-1,000,000 SF users. There is also an active push towards the development of the smaller bay product type by developers such as Dermody, Clarion, Becknell, and CapRock, who are designing flexible buildings to cover requirements from 30,000-200,000 SF. The market has also seen an increase in spec owner/user developments with EBS Realty Partners under construction with two projects totaling 200,000 SF and Odyssey Real Estate Capital completing construction earlier this year on an 86,000 SF condo project. These projects are filling a void in the market as we have seen an increase in owner/user demand over the past year, mostly driven by California companies relocating to Las Vegas.
Significant transactions in 2020 include: RB Health’s 322,560 SF Build-to-Suit at Northgate Distribution Center; FedEx’s 632,324 SF lease at Prologis I-15 Speedway Logistics Center; Ruby Has’ 373,363 SF lease at North 15 Logistics; Whitebox Technologies’ ±350,528 lease at Golden Triangle Logistics Center; Camco Manufacturing’s 203,884 SF lease at Northgate Distribution Center; Amazon’s 202,190 SF lease at Silver State Commerce Center; Amazon’s 170,272 SF lease at Tropical Logistics Center; Westrock’s 213,785 SF lease at Centennial Commerce Center; and Lowe’s 285,548 SF lease at Raceway Industrial Park. Landlords are currently asking $0.58-$0.65 PSF NNN for midbay, $0.50-$0.57 PSF NNN for light distribution, and $0.45-$0.50 PSF NNN for distribution product over 100,000 SF.
Investment sale activity remained strong in 2020, setting record highs in terms of cap rate and price per SF for the North Las Vegas market. Investment transactions included: Northgate Distribution Center’s 322,560 SF RB Health BTS sold to private investor; Tropical Distribution Center’s 855,000 SF leased to Amazon then sold to Preylock; and PanCal’s portfolio acquisition which included 312,500 SF in North Las Vegas.
The surge of development that has taken place over the last five years has consumed most of the larger developable sites (35 acres & above) in North Las Vegas. Pricing for land parcels ranges from $8-$12 PSF depending upon the size, location, topography, and whether or not utilities/offsite work is completed.