Vegas Industrial Continues to Feel the Pressure

LAS VEGAS-A quartet of reports on the industrial market here don’t agree on a current average vacancy rate or net absorption but the forecast is largely the same, with increasing sublease availabilities and declining asking rates expected to persist throughout the rest of the year despite little new development.

As for the current state of things, it depends on who you ask. Vacancy could have ended the quarter below 10% or above 14%. Net absorption could have been positive by a quarter of a million square feet or negative to the tune of nearly 2 million square feet. The differences are typically due to the type and size of space tracked, when a space is considered vacant and whether or not subleases are included in calculations.

Restrepo Consulting Group LLC, which tracks 106 million square feet, estimates current vacancy at 14.2%, up from 13.2% at the end of the second quarter thanks to 1.8 million square feet of negative net absorption. “Who would have thought back in the first quarter of 2007, when we had an industrial vacancy rate of 4.3% that we would be at 14.2% today,” says principal John Restrepo. “It’s quite extraordinary how quickly and deeply our once vaunted industrial market has been impacted by the recession.”