Industrial Market Update
The industrial market has been very strong over the past four years. With an overall vacancy of under 10% we are quickly feeling the squeeze of a 2% drop in vacancy in less than a year. Nevada has been a hotspot for out of state businesses looking to take advantage of our tax structure that includes no inventory tax, franchise tax, state tax, or corporate and personal tax. These benefits have been noticed by many businesses around the nation, however most prevalent difference in costs comes from our close neighbor California, and we anticipate more inbound companies coming over the hill in years to come.
While there are many big named companies coming to the area taking large amounts of space it is the small businesses that make up 41% of Nevada’s small manufacturing, products, services, and storage space. It is within these smaller spaces that Reno/Sparks has very limited options. The flex and small warehouse market are extremely tight as vacancies for lease and buildings for sale are historically low and continue to drop. In the entire Reno/Sparks market there are only four industrial listings for sale that are under 10,000 square feet and are priced very aggressively. This presents a great opportunity for owners as they are in an excellent position to take advantage of this upswing in demand and perform either a sale or a sale lease back in order to obtain capital needed to grow the business and pay off outstanding debt. With vacancy this low and demand increasing, we anticipate the rental market for these suites to remain incredibly active and the lease rates and sales prices to continue to increase.