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Industrial Vacancies, Concessions Rise

LAS VEGAS-In addition to an 8.3% vacancy rate, three months free rent is now common on five-year leases, with some tenants winning five months. That's up from the usual one or two months.

By John Rebchook | Updated on December 03, 2001

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.”

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