Written by: Rob Sabo, 11/12/2012
Northern Nevada Business Weekly
Northern Nevada’s lack of vacant top-tier industrial space soon could lead to a loss of business for the region — but even so, don’t expect to see developers mobilizing to begin construction of speculative buildings anytime soon.
Instead, developers are waiting — ready with plans drawn and approved — for potential tenants to come aboard before breaking ground on any new construction.
Despite having just a few class A industrial buildings in the market that can accommodate new businesses seeking 250,000 square feet or more, developers won’t begin new construction until market rents increase by as much as 30 percent, says Tom Miller of Miller Industrial Properties.
“The economics don’t work at today’s market numbers,” Miller says. “We are 25 to 30 percent below where we need to be to make the hurdle for any kind of investment return — and a 30-percent jump in rental rates isn’t predicted in the real near term.”
Once the three vacant large industrial properties in the Sparks, Stead and Tahoe Reno Industrial submarkets fills, commercial brokers and economic development officials will have to adjust their pitches to lure new businesses to northern Nevada. (Read More)