The Las Vegas industrial market is undergoing its most substantial development activity since before the pandemic. In Q1 2024 alone, 3.3 million square feet of new inventory was delivered, with an additional 12.2 million square feet in the pipeline. The majority of this development is concentrated in areas such as North Las Vegas, Speedway, and SE/Henderson. Despite the influx of new inventory, rising construction levels indicate that new projects are commencing in 2024, leading to an increase in vacancy rates. Negative net absorption of -182,000 square feet suggests that supply may exceed demand, with absorption experiencing a significant decline in the last two quarters compared to post-pandemic trends.

In Q1 2024, Las Vegas saw a notable increase in industrial vacancy, reaching 5.7%, with direct vacancy at 4.8% and sublet vacancy at 0.9%. Direct vacancy rose by 180 basis points from Q4 2023, while sublet vacancy increased by 40 basis points from Q3 2023. This surge was expected due to 3.3 million square feet of new construction added to the market. Notably, the reported 17.9 million square feet of direct space includes areas with expiring leases awaiting renewal, compared to 14.9 million square feet last quarter. With only 3.2 million square feet of the 12.2 million square feet under construction fully pre-leased, vacancy rates may rise further.

In the Las Vegas industrial market, Class A and Class B rents have historically remained relatively close, typically differing by just $0.10. However, in the most recent quarter, Class B rents edged slightly above Class A. On average, Las Vegas industrial monthly asking rents reached $1.17 per square foot in Q1 2024, with Class A commanding $1.20, Class B at $1.18, and Class C at $1.10. Overall, asking rents have experienced a notable increase of $0.11 since Q1 2023, indicating a robust uptick of over 10% in just one year. These trends suggest a healthy and growing industrial market in Las Vegas, with demand driving rents upward across all classes of industrial properties.