2. glossary
Industrial Definitions
incubator: Multi-tenant buildings without dock-high loading doors that have a parking ratio lower than 3.5/1,000 square feet
and bay sizes lower than 3,500 square feet.
light Distribution: Multi- or single-tenant buildings that include dock-high loading doors and have bay sizes of less than
VEGAS
LAS
15,000 square feet.
light industrial: Multi- or single-tenant buildings without dock-high loading doors that have a parking ratio lower than
QU A R T square feetY in the case of multi-tenant buildings, bay sizes of at least 3,500 square feet.
3.5/1,000 E R L and,
r&D/Flex: Multi- or single-tenant buildings without dock-high loading doors with parking ratios in excess of 3.5/1,000
square feet.
Warehouse/Distribution: Multi- or single-tenant buildings that include dock-high loading doors and have bay sizes of at least
15,000 square feet.
Office Definitions
Class a office: buildings with steel frame construction, high end exterior finish, distinctive lobbies featuring upgraded
finishes, amenities including on-site security, state-of-the-art communications and data infrastructure and covered parking.
Class a buildings are usually multi-story.
Class b office: buildings osteel frame, reinforced concrete or concrete tilt-up construction. Class b buildings contain
common bathrooms and hallways, and their lobbies may have granite and hardwood detailing. Class b buildings are often
multi-story.
Class C office: buildings of wood frame construction. Class C buildings are often garden-style and are built around
courtyards.
Medical office: buildings that are more than 50% occupied by medical tenants.
Retail Definitions
Community Center: retail centers anchored by supermarkets, drug stores and discount department stores. tenants
include off-price retailers selling apparel, home improvements/furnishings, toys, electronics or sporting goods.
Neighborhood Center: retail centers anchored by supermarkets and drug stores. Neighborhood centers are intended for
convenience shopping for day-to-day needs of consumers.
Power Center: retail centers dominated by several large anchors including discount department stores, off-price stores,
warehouse clubs or “category killers”. Power centers generally inline space.
General Definitions
Vacant sF: space in a building that is unoccupied and offered for lease by the owner of the company.
sublease sF: space in a building that offered for sub-lease by the primary tenant. this space may or may not be
unoccupied.
Net absorption: the difference in occupied square footage from one period to another. v
this report and other research materials may be found on our website at www.lvcolliers.com. this quarterly report is a research
document of Colliers international – las Vegas, NV. Questions related to information herein should be directed to the research Department at
702-836-3781.informationcontainedhereinhasbeenobtainedfromsourcesdeemedreliableandnorepresentationismadeastotheaccuracythereof.ColliersNevada,llCdbaColliersinternationalisanindependentlyownedandoperatedbusinessand
a member firm of Colliers international Property Consultants, an affiliation of independent
companies with over 294 industrials throughout more than 61 countries worldwide.
lVQ | Q1/10
3. C o l l i e r s l a s V e g a s | F i r s t Q ua rt e r | 2 0 1 0
John M. stater
research Manager
jstater@lvcolliers.com
702-836-3781
Contents
Mike Mixer
economic review ........................................ 4
Managing Partner John M. stater
mmixer@lvcolliers.com
702-836-3777 While the national economy continues to show signs of
Chris Poese
economic recovery, Southern Nevada economy remains
graphic artist essentially flat.
cpoese@lvcolliers.com
702-836-3721
Colliers international
3960 howard hughes Parkway
industrial review ......................................... 8
suite 150 John M. stater
las Vegas, NV 89169
United states
The condition of Southern Nevada’s industrial market is
P: 702-735-5700 improving slowly.
F: 702-731-5709
www.lvcolliers.com
office review ............................................. 16
John M. stater
Southern Nevada’s office market continues to show signs of
recovery, and has seen an end to the free fall it experienced
in 2008 and 2009.
retail review ............................................. 22
John M. stater
Southern Nevada’s retail market showed minor improvement
in the first quarter of 2010, but continued to suffer from rising
vacancy and falling net absorption.
land review ............................................... 28
John M. stater
There remain thousands of acres of residential-zoned land
that are owned free and clear, but owners of that land paid
more than $250,000 per acre.
294 oFFiCes in 61 Countries on 6 Continents 3
$48. 1 B i l l i o n i n annual trans action Volume | 1 .1 Billion sF Manage d | 1 2 ,7 4 9 Professiona ls
4. economic review
VEGAS
las Vegas Msa gaMing reV
LAS
While the national economy continues to show
signs of economic recovery, southern Nevada’s Las Vegas MSA Gaming Revenue
Q U A R T E R LY
$12,000,000,000
economy remains unchanged. leading indicators $10,000,000,000
in southern Nevada have been essentially flat for
several months, suggesting that local recovery is $8,000,000,000
not in our immediate future. Unemployment in $6,000,000,000
the las Vegas Msa reached 13.8% after posting a
decline at the end of 2009. Job losses continue and $4,000,000,000
both gaming revenue and taxable sales are down $2,000,000,000
year-over-year. the number of residential permits
that were pulled in January of 2010 was almost $0
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010 YTD
four times that in January of 2009. New homes
sales were down, while sales of existing homes
were up.
las Vegas Msa eMPloyMent
southern Nevada continued to shed jobs at a
quick pace in the first quarter of 2010. between Las Vegas MSA Employment
February 2009 and February 2010, the only 1,000,000
sectors of employment that showed growth 900,000
were health & social services and Professional
800,000
700,000
& business services. UNlV’s Center for business 600,000
and economic research is forecasting continued 500,000
job losses of 5.2 percent in 2010, easing by the 400,000
end of that year, and modest 0.5-percent growth 300,000
in 2011.
200,000
100,000
apartment vacancy was up by 12.5% between 0
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010 YTD
the fourth quarter of 2009 and the fourth quarter
of 2008 and the residential electric meter count
was down by 0.1% between February 2010 and
February 2009. the driver’s license count showed las Vegas Msa Visitor VoluMe
the number of new residents down by 12.2%
between February 2010 and February 2009. 45,000,000
Las Vegas MSA Visitor Volume
National economic recovery, coupled with the 40,000,000
continued recession locally, should keep southern 35,000,000
Nevada’s population on the decline through 2010. 30,000,000
stagnant population growth will probably slow 25,000,000
down the absorption of vacant retail space. 20,000,000
the hospitality & leisure sector continues to be 15,000,000
plagued by problems of its own, keeping southern 10,000,000
Nevada’s engine of growth idle. spurred on 5,000,000
by deep discounts on hotel rooms, year-over- 0
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010 YTD
year visitor volume grew by 2.4%. Most other
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5. C o l l i e r s l a s V e g a s | F i r s t Q ua rt e r | 2 0 1 0
important measures, however, continued to slide. in 2009, when 21 banks with combined assets of
between January 2010 and January 2009, convention $9.5 billion were taken over by the FDiC. No banks
attendance was down 16.4%, airplane passengers at headquartered in southern Nevada have failed so far
McCarran international airport were down 0.2% this year. Nationally, banks that failed so far this year
and gaming revenue was down 2.2%. las Vegas’ had combined assets of $18.5 billion.
room inventory grew by 5.8% between January 2010
and January 2009, largely due to the completion of recovery index
portions of MgM Mirage’s CityCenter. on the bright Ultimately, the key to recovery for commercial real
side, CityCenter’s performance has been better than estate is employment growth. as total employment
local gaming analysts expected, and increased visitor has plummeted, occupancy of commercial real estate
volume should help lessen the impact CityCenter has followed. several factors feed into the prospect for
has on other high-end “strip” resorts. overall, local renewed employment growth in southern Nevada,
gaming analysts expect some recovery on the “strip” which we have combined into a composite index. the
in 2010, a portent of recovery in southern Nevada’s index showed a slight decline between December
economy as a whole in 2011. 2009 and January 2010. six indexes contributed
investment sales in southern Nevada picked up negatively to the composite index: New home
slightly in the first quarter of 2010, but continue to be sales, Commercial occupancy, Visitor Volume, New
far below the levels seen in 2006 and 2007. sales of residents, employment, and in-loaded Containers
foreclosed commercial real estate are sparse. the gap at the Port of los angeles. three indexes, gaming
in expectations between buyers and sellers remains revenue, taxable sales and Personal Consumption,
vast, but some sellers are starting to price their contributed positively to the index. the decline in
properties on actual, rather than pro forma, income. the composite index that began in 2007 is slowing,
Cap rates are likely to increase another 100 basis but it is not yet trending upwards. this suggests to us
points in 2010, making potential investors reluctant to that meaningful recovery is not likely until 2011 at the
jump into the market now. earliest.
the amount of distressed commercial real estate in
southern Nevada continued to increase in the first
quarter of 2010. We are tracking almost 8-million
square feet of distressed industrial, office and retail Clark County eConoMiC Data
property in southern Nevada, up from 6.6 million Oct-09 Oct-08
square feet last quarter. approximately 40 percent of Unemployment rate 13.8% 10.3%
this space is office product, 40 percent retail and 20 Visitor Volume 3,141,556 3,066,738
percent industrial. the largest quarter-over-quarter gaming revenue $764.36 M $781.67 M
increase was in industrial space, which grew by 55% taxable sales ytD* $7.166 b $8.208 b
to 1.6-million square feet. the amount of distressed residential Permits** 466 134
office space grew by 29% to 3.2-million square feet, Commercial Permits** 21 31
while distressed retail grew by a scant 2% to 3.2 New home sales 240 284
million square feet. the number of foreclosure sales existing home sales 3,111 2,536
of commercial real estate remains low. * December 2009 / December 2008
** February 2010 / February 2009
according to the FDiC website, 30 banks failed so Source: The Center for Business & Economic Research, UNLV
far in 2010. this is an increase over the same period
294 oFFiCes in 61 Countries on 6 Continents 5
$48. 1 B i l l i o n i n annual trans action Volume | 1 .1 Billion sF Manage d | 1 2 ,7 4 9 Professiona ls
6. VEGAS
LAS
looking ahead local economy. Medical research centers
like the Cleveland Clinic for brain health
Q U A R T E R LY as the impact of the construction
and the Nevada Cancer institute are one
industry on the local economy recedes,
form of diversification that is happening
the need for economic diversification will
now. other avenues include solar energy
become ever more apparent. southern
and trade centers on the model of the
Nevada remains a popular place to live
World Furniture Center. We all know
and do business, due its pleasant climate
that times are bad now, but we should
and friendly tax environment. as tourism
also be aware that exciting things are in
recovers along with the national economy,
southern Nevada’s future if only we have
our primary engine of growth will come
the foresight to plan ahead.
to life. this, in turn, will spur recovery in
our construction sector as the standing
inventory of residential and commercial
real estate is exhausted. in short,
southern Nevada’s economy will recover
to a point with or without diversification.
Diversification of the local economy
is important, however, for establishing
greater economic stability. Nobody
wants to see another severe recession in
the near future, but it will surely come
without a continued push to diversify the
DistresseD sQuare Footage By ProDuCt tyPe
Distressed Square Footage By Product Type
62,000
R&D/Flex 144,000 Q4‐09 Q1‐10
104,000
Incubator 220,000
476,000
Light Industrial 738,000
49,000
Light DistribuKon 139,000
323,000
Harehouse/DistribuKon 340,000
892,000
Neighborhood Center 907,000
1,194,000
Community Center 1,229,000
1,017,000
Power Center 1,027,000
438,000
Medical Office 614,000
1,217,000
Class C Professional 1,496,000
537,000
Class B Professional 656,000
314,000
Class A Professional 501,000
0 200,000 400,000 600,000 800,000 1,000,000
1,200,000
1,400,000
1,600,000
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7. C o l l i e r s l a s V e g a s | F i r s t Q ua rt e r | 2 0 1 0
eMPloyMent growth (year oVer year)
Employment Growth (Year Over Year)
Retail ‐5,200
Health Care & Social Assistance 1,700
Professional & Business Services ‐400
=inancial Ac0vi0es ‐2,200
Wholesale ‐200
6ransporta0on & Warehousing ‐1,400
Manufacturing ‐1,600
‐20,100
Construc0on
‐25,000 ‐20,000 ‐15,000 ‐10,000 ‐5,000 0 5,000
CoMMerCial real estate reCoVery inDex
Commercial Real Estate Recovery Index
110
2006 = 100
105
100
95
90
85
80
Jan 2005
Feb 2005
Mar 2005
Apr 2005
May 2005
Jun 2005
Jul 2005
Aug 2005
Nov 2005
Sep 2005
Oct 2005
Dec 2005
Jan 2006
May 2006
Jun 2006
Aug 2006
Oct 2006
Nov 2006
Dec 2006
Jan 2007
Feb 2007
Mar 2007
Apr 2007
May 2007
Jun 2007
Jul 2007
Aug 2007
Sep 2007
Oct 2007
Nov 2007
Dec 2007
Jan 2008
Feb 2008
Mar 2008
Apr 2008
May 2008
Jun 2008
Jul 2008
Aug 2008
Sep 2008
Oct 2008
Nov 2008
Dec 2008
Jan 2009
Feb 2009
Mar 2009
Apr 2009
May 2009
Jun 2009
Jul 2009
Aug 2009
Sep 2009
Oct 2009
Nov 2009
Dec 2009
Jan 2010
Mar 2006
Sep 2006
Feb 2006
Jul 2006
Apr 2006
294 oFFiCes in 61 Countries on 6 Continents 7
$48. 1 B i l l i o n i n annual trans action Volume | 1 .1 Billion sF Manage d | 1 2 ,7 4 9 Professiona ls
9. C o l l i e r s l a s V e g a s | F i r s t Q ua rt e r | 2 0 1 0
feet in the first quarter of 2010. this was a slight decline in year-over-year vacancy experienced eight
increase from the 370,608 square feet recorded at quarters later. During this recession, year-over-year
the end of last year. Most of the space in the pipeline vacancy increased for seven quarters between the
is in the Marnell air Cargo Center located in the first quarter of 2007 and third quarter of 2008.
airport submarket. of the remainder, more than half the most active businesses taking industrial space in
is in the form of build-to-suit projects. 2009 were involved in food services, transportation,
Net absorption was much improved this quarter over retail services, manufacturing and construction.
last, with only 497,401 square feet of industrial space even though the number of deals signed were fairly
returned to the market. Net absorption improved even between companies headquartered in Nevada
this quarter for light industrial and Warehouse/ versus companies from other states, the companies
Distribution space, with the latter posting almost headquartered outside of Nevada took 83% of the
100,000 square feet of net absorption. both the all the square feet occupied during the first quarter
airport and henderson submarkets posted positive of 2010. this trend will probably continue for the
net absorption this quarter, with the West Central rest of the year.
submarket joining those two in increasing net 54% of all leases signed in 2009 were signed by
absorption on a quarterly basis. gross absorption of companies headquartered in Nevada, while 13%
industrial space stood at 3.6 million square feet in were with California companies. 47% of leases
southern Nevada this quarter, double what it was signed in 2009 were with regional or national
one year ago. companies (companies operating in multiple states
industrial vacancy increased to 15% this quarter, a and/or internationally). given the state of the local
0.5 point increase from one quarter ago and a 3.8 economy, leasing activity by national and regional
point increase from one year ago. industrial vacancy companies should loom large in the coming months,
has been rising for 15 straight quarters, since the and will probably benefit some product types, such
second quarter of 2006, when it was at a low of as Warehouse/Distribution, more than others.
3.1%. the Northwest submarket continued to have the weighted average asking lease rate for industrial
the Valley’s highest vacancy rate at 32.8%. although space decreased this quarter to $0.59 psf NNN
east las Vegas experienced a sharp increase in from last quarter’s $0.61. if adjusted for inflation , the
vacancy, it continued to have the lowest vacancy weighted average asking lease rate actually increased
rate in the Valley at 9.4%. Vacancy increased in the this quarter by $0.01 psf. adjusted for inflation, the
east las Vegas, North las Vegas, Northwest and weighted average asking lease rate for industrial
southwest submarkets, and decreased in the airport product has dropped by $0.22 psf from its peak in
and henderson submarkets. this was the second the first quarter of 2007. Current inflation-adjusted
straight quarter in which henderson industrial asking rental rates are almost equal to what they
vacancy decreased. Warehouse/Distribution space were in the third quarter of 2004.
also experienced a small decrease in vacancy since
last quarter. achievable rental rates, i.e. the rental rates actually
being paid by new industrial tenants, are as much
the change in industrial vacancy on a year-over-year as $0.33 psf lower than asking rental rates. the gap
basis was 3.8 points this quarter, lower than the 4.3 between achievable and asking rates averaged $0.11
point increase in the fourth quarter of 2009. this during 2009, and now stands at an average of $0.16
number had been on the decline for four quarters in the first quarter of 2010. the largest gap is in r&D/
before spiking last quarter. given the rapid increase in Flex projects, while there is virtually no gap now in
vacancy experienced in 2009,
MaRket SnapShOt
it is likely that this number
Q1-10 Q4-09 Q1-09 Q-O-Q Change Y-O-Y Change
will fall through most of 2010.
Vacancy rate 15.0% 14.5% 11.2% + 3.4% + 33.9%
year-over-year vacancy
increased for three quarters asking rent (PsF, NNN) $0.59 $0.61 $0.76 - 3.3% - 22.4%
Net absorption (sF) -497,401 -815,284 -288,378 + 38.9% - 72.5%
during the mini-recession
New Completions (sF) 0 495,529 739,803 - 100.0% - 100.0%
of 2001-2002, with the first
294 oFFiCes in 61 Countries on 6 Continents 9
$48. 1 B i l l i o n i n annual trans action Volume | 1 .1 Billion sF Manage d | 1 2 ,7 4 9 Professiona ls
10. inDustrial
VEGAS
light industrial projects. the InDuStRIal eMplOYMent
LAS
lowest gap between achievable Feb 2010 Feb 2009 Change
and asking rents among Construction 51,300 74,200 -22,900
Q U A R T E R LY submarkets is in east las Vegas, Manufacturing 20,200 22,300 -2,100
with achievable rents $0.06 transportation & Warehousing 30,400 32,500 -2,100
“While local and regional higher than the average asking Wholesale 21,000 22,200 -1,200
rent, and North las Vegas, with total 122,900 151,200 -28,300
economic weakness will achievable rents only $0.06 Source: Nevada Department of Employment, Training and Rehabilitation.
continue to hamper a lower than the average asking of $118 and $149 respectively. Prominent
complete recovery of our rent. owner/user sale availabilities include
industrial market, national adjustments in asking rents were more the berlin industries building in the
recovery will help at least balanced this quarter than last. Four Northwest submarket (101,000 square
submarkets experienced an increase in feet), the Decatur business Center
some segments of the
asking rents and only three a decrease. in the southwest submarket (87,000
industrial market prosper.” of the five product types, only incubator square feet) and the Progressive gaming
space saw an increase in asking rents. Facility in the airport submarket (87,000
the 289 new availabilities that entered square feet).
the industrial market this quarter had an the inventory of industrial buildings
average asking rental rate of $0.54 psf for sale as investments increased from
NNN, $0.06 lower than the 278 new 1,185,000 square feet in the fourth
availabilities that entered the industrial quarter of 2009 to 1,213,000 square
market during the fourth quarter of feet this quarter. the average asking
2009. of existing availabilities, 21% price decreased by $2 psf this quarter to
had their asking lease rate decrease $133 psf. sellers of industrial investment
this quarter by an average of $0.14 psf, properties are still quoting an average
while 22% showed an increase by an cap rate of 8%, though it is important
average of $0.15 psf. this is a marked to note that more and more sales
change from the 2009, when only listings fail to quote a cap rate at all, just
three to five percent of existing leases as fewer and fewer investment sales
posted an increase in asking rent. these comps quote a cap rate. Prominent
movements in asking rent suggest that investment sale availabilities include
landlords are becoming more confident hughes airport Center bldg 14 in the
in the future of southern Nevada’s airport submarket (133,000 square
industrial market. feet), Patrick lane industrial Park in the
the inventory of industrial properties airport submarket (100,000 square
available for owner/user sale decreased feet) and aabacus industrial Park in the
this quarter to 3,886,000 square feet southwest submarket (72,000 square
from 4,044,000 square feet in the fourth feet).
quarter of 2009. one year ago, there in the first quarter of 2010, 204,000
was 4,065,000 square feet of owner/ square feet of industrial properties sold
user space on the market. the average as investments at an average sales price
asking price for owner/user industrial of $121 psf. this represented a very
sales decreased to $132 psf, well below small decrease in terms of square feet
the average asking price of $152 psf ReGIOnal WaRehOuSe / DIStRIbutIOn
recorded one year ago. More than 65% Market asking Rent (Q4-09)
of the available owner/user sale square las Vegas, NV $0.47 psf NNN
footage in southern Nevada was in Phoenix, aZ $0.53 psf NNN
the North las Vegas and southwest inland empire, Ca $0.32 psf NNN
submarkets, with average asking prices reno, NV $0.31 psf NNN
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sold from one year ago, but a substantial increase in southern Nevada, light Distribution is probably
in the average price. owner/user sales this quarter the most closely tied to the health of the “strip”
amounted to only 36,000 square feet with an resorts. you can expect the prospects for recovery
average price of $141 per square foot, again showing of the light Distribution market to improve if visitor
a decrease in the amount of space sold from one volume and gaming revenue continue to improve.
year ago, but an increase in the average price. light industrial space could be the poster child for
Despite the “expectations gap” between buyer and industrial over-supply in southern Nevada. From
sellers, and continued difficulties in securing loans 2007 to 2009 a total of 2.85 million square feet of light
for commercial real estate, the sales market does industrial space was completed, much of it because
appear to be stabilizing. higher prices for industrial land made freestanding
Net absorption in Warehouse/Distribution product buildings that could be leased and quickly sold an
turned positive in the first quarter of 2010, coming in attractive option for developers. Unfortunately, net
at 92,779 square feet. the Warehouse/Distribution absorption of light industrial space over the same
market enjoys greater leasing activity from national period was -621,652 square feet. recently, though,
and regional companies than do other product there have been some signs of improvement. Net
types in southern Nevada, and therefore might absorption in the first quarter of 2010 was almost
lead the market into recovery, or at least buck the 300,000 square feet higher than in the fourth
overall industrial trend. the local transportation quarter of 2009, and lease comparables suggest that
sector is still shedding jobs on a year-over-year landlords have been pricing light industrial space just
basis, however, so hopes of a quick turn-around about right for the past four quarters. on the down
based on a single quarter of positive net absorption side, the light industrial market is dominated by local
might be premature. the asking rent of Warehouse/ companies, with almost 70% of the companies taking
Distribution space in southern Nevada was still light industrial space last year being headquartered
higher than in California’s inland empire and reno in Nevada. since the local economy is still showing
in the fourth quarter of 2009, but was lower than signs of distress, the chances for a speedy recovery
in Phoenix, arizona, a key competitor. the amount of the light industrial market remain slim.
of Warehouse/Distribution space available for sub- if the market for incubator space is any indication,
lease increased by 278,000 square feet this quarter, small businesses are not yet recovering in southern
again suggesting the product type is not out of the Nevada. although net absorption for incubator
woods yet. Just the same, we think Warehouse/ space was positive in fourth quarter 2009, it turned
Distribution will lead the industrial pack in 2010. negative again this quarter, returning 70,828 square
light Distribution space continued to struggle this feet to the market. small business people are still
quarter, posting -299,912 square feet of net absorption, facing an unsure environment of taxes, health
a significant decrease from the 11,464 square feet insurance and regulations, and this as much as
of net absorption in the fourth quarter of 2009. anything will keep them, and the incubator market,
Vacancy stood at 22%, a 1.7 point increase from last on the sidelines in 2010.
quarter, and a 4.8 point increase from one year ago. the very flexibility that seemed to serve r&D/Flex
the average asking lease rate for light Distribution space well in 2009 failed to save it in first quarter
space decreased this quarter over last by $0.04 to 2010, possibly because retail and office tenants are
$0.53 psf NNN. of all the industrial product types
InDuStRIal DevelOpMent pIpelIne
project type Submarket Size pre-leasing Completion
1192 Center Point light industrial henderson 25,000 sF bts Q2-10
7000 W Post rd light industrial southwest 50,000 sF bts Q3-10
7040 redwood light industrial southwest 50,000 sF 0% Q3-10
Marnell air Cargo Center Warehouse/Distribution airport 79,000 sF 100% Q3-10
Marnell air Cargo Center light Distribution airport 122,000 sF 59% Q3-10
294 oFFiCes in 61 Countries on 6 Continents 11
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12. inDustrial
VEGAS
LAS
finding competitively priced retail and renter is not good for the seller/landlord,
Q U A R T E R LY office space more satisfactory to their and plunging rental rates will push more
needs. although r&D/Flex space posted industrial product into foreclosure.
positive net absorption in 2009, net Distressed industrial space totaled
absorption fell to -101,171 square feet this 1,572,000 square feet in first quarter
quarter and vacancy jogged upward to 2010, a 55% increase from last quarter.
28.8%. southern Nevada’s industrial market is
southern Nevada’s industrial market had going through a monumental period of
a hard time in 2009, and it is not yet clear re-pricing and restructuring. 2010 will be
that 2010 will be significantly better. gross a tumultuous year, but we believe a better
absorption has rebounded substantially year than 2009 by most measures. While
since this time last year, but high negative local and regional economic weakness will
net absorption suggests that southern continue to hamper a complete recovery
Nevada isn’t capturing new tenants, but of the industrial market, national recovery
rather seeing existing tenants on the hunt will help at least some segments prosper.
for lower rents. in itself, this is not a bad
thing for the economy as a whole. in a
long recession, companies must reduce
their expenses to stay in business, and
the local industrial market certainly does
not need more businesses vacating space.
a market that is good for the buyer/
year oVer year VaCanCy Change
Y‐O‐Y Vacancy Change
6.0%
4.8%
5.0%
4.3%
4.2%
4.2%
4.0%
3.8%
3.8%
3.5%
4.0%
3.1%
2.7%
2.6%
3.0%
2.1%
2.1%
1.8%
1.8%
1.6%
1.6%
1.6%
1.4%
1.4%
2.0%
0.7%
0.6%
1.0%
0.2%
0.0%
‐0.1%
‐0.1%
‐1.0%
‐0.9%
‐1.1%
‐1.5%
‐1.6%
‐1.8%
‐2.0%
‐2.2%
‐2.2%
‐2.5%
‐3.0%
‐3.2%
‐3.5%
‐3.5%
‐4.0%
‐3.9%
‐5.0%
Q101
Q201
Q301
Q401
Q102
Q202
Q302
Q402
Q103
Q203
Q303
Q403
Q104
Q204
Q304
Q404
Q105
Q205
Q305
Q405
Q106
Q206
Q306
Q406
Q107
Q207
Q307
Q407
Q108
Q208
Q308
Q408
Q109
Q209
Q309
Q409
Q110
lVQ | Q1/10
13. C o l l i e r s l a s V e g a s | F i r s t Q ua rt e r | 2 0 1 0
oCCuPanCy Vs inDustrial eMPloyMent
170,000 91.0%
89.7%
90.0%
160,000
88.8%
89.0%
150,000 87.6% 88.0%
140,000 86.6%
87.0%
85.5% 86.0%
130,000
85.0%
85.0%
120,000
84.0%
161,400
148,000
137,400
132,500
128,100
122,900
110,000
83.0%
100,000 82.0%
4 Q 2008 1 Q 2009 2 Q 2009 3 Q 2009 4 Q 2009 1 Q 2010
Industrial Jobs Occupancy Rate
historiCal net aBsorPtion Vs CoMPletions
739,803
1,000,000
495,411
495,529
800,000
342,574
212,270
600,000
400,000
41,723
200,000
0
0
‐200,000
‐288,378
‐400,000
‐497,401
‐600,000
‐800,000
‐815,284
‐831,975
‐1,000,000
‐1,016,256
‐1,200,000
4 Q 2008 1 Q 2009 2 Q 2009 3 Q 2009 4 Q 2009 1 Q 2010
/01 234567859 :5;7<08594
294 oFFiCes in 61 Countries on 6 Continents 13
$48. 1 B i l l i o n i n annual trans action Volume | 1 .1 Billion sF Manage d | 1 2 ,7 4 9 Professiona ls
14. inDustrial
VaCanCy Vs rental rate
16.0% $0.76 $0.76 $0.80
$0.71
14.0% $0.66 $0.70
$0.61 $0.59
12.0% $0.60
10.0% $0.50
8.0% $0.40
6.0% $0.30
4.0% $0.20
2.0% $0.10
10.3% 11.2% 12.4% 13.4% 14.5% 15.0%
0.0% $‐
4 Q 2008 1 Q 2009 2 Q 2009 3 Q 2009 4 Q 2009 1 Q 2010
Vacancy Asking Rental Rate
InDuStRIal SaleS
Q1-10 Q4-09 Q1-09
owner/User
space for sale (sf) 3,886,000 4,044,000 4,065,000
average asking Price/sF $132 $138 $152
space sold (sf) 36,000 151,000 142,000
average Price/sF $141 $160 $100
investment
space for sale (sf) 1,213,000 1,185,000 1,050,000
average asking Price/sF $133 $135 $137
average Cap rate 8.0% 8.0% 7.3%
space sold (sf) 214,000 258,000 195,000
average Price/sF $115 $66 $91
average Cap rate n/a n/a 5.6%
lease aCtiVity
pROpeRtY aDDReSS leaSe Date leaSe teRM SIze leaSe Rate tYpe
hughes Cheyenne Center Feb 2010 126 months 84,397 sf $0.52 NNN Warehouse/Distribution
Wigwam Jones industrial Park Jan 2010 38 months 9,401 sf $0.56 Mg light Distribution
Procyon avenue business Center Feb 2010 36 months 7,967 sf $0.53 NNN light industrial
West harmon business Park Feb 2010 13 months 2,788 sf $0.52 NNN r&D/Flex
ali baba Commerce Center Jan 2010 38 months 2,211 sf $0.55 NNN incubator
sales aCtiVity
pROpeRtY aDDReSS SaleS Date Sale pRICe SIze pRICe/SF tYpe
Decatur Crossing Feb 2010 $17,750,000 140,594 sf $126.25 light Distribution
Park West business Center Mar 2010 $2,000,000 23,517 sf $85.04 Warehouse/Distribution
Coleman airpark Jan 2010 $900,000 12,439 sf $72.35 light industrial
traverse Point Commerce Center Jan 2010 $887,000 8,020 sf $110.60 light industrial
h bizctr Whitney Mesa Jan 2010 $645,930 7,177 sf $90.00 r&D/Flex
lVQ | Q1/10
15. C o l l i e r s l a s V e g a s | F i r s t Q ua rt e r | 2 0 1 0
InDuStRIal MaRket StatIStICS
FIRSt QuaRteR 2010
eXIStInG pROpeRtIeS DIReCt vaCanCY SubleaSe vaCanCY tOtal vaCanCY net abSORptIOn SF u/C and pROpOSeD SF avG RentS
total vacancy Completed
Current Completed under
type bldgs Inventory Sq Ft Rate Sq Ft Rate Sq Ft Rate Rate YtD this Qtr Rate
period YtD Constr
Sq Ft previous Q Sq Ft
Sub MaRketS
aIRpORt SubMaRket
Wh 76 4,667,484 388,531 8.3% 45,700 1.0% 434,231 9.3% 16.9% 355,757 355,757 - - 78,936 $0.57
lD 67 2,969,897 664,543 22.4% 31,453 1.1% 695,996 23.4% 21.8% (49,570) (49,570) - - 121,992 $0.57
lI 199 2,864,013 311,337 10.9% 8,995 0.3% 320,332 11.2% 10.8% (22,184) (22,184) - - - $0.76
InC 91 1,750,621 274,027 15.7% 6,508 0.4% 280,535 16.0% 16.9% 13,970 13,970 - - - $0.79
FlX 66 1,308,181 394,897 30.2% 17,076 1.3% 411,973 31.5% 32.2% 8,753 8,753 - - - $0.90
tOtal 499 13,560,196 2,033,335 15.0% 109,732 0.8% 2,143,067 15.8% 18.2% 306,726 306,726 - - 200,928 $0.69
eaSt laS veGaS SubMaRket
Wh 24 1,022,855 100,080 9.8% 0 0.0% 100,080 9.8% 0.0% (100,080) (100,080) - - - $0.70
lD 20 352,819 35,089 9.9% 0 0.0% 35,089 9.9% 11.0% 3,827 3,827 - - - $0.47
lI 93 1,152,384 52,818 4.6% 6,400 0.6% 59,218 5.1% 4.0% (13,540) (13,540) - - - $0.44
InC 13 298,623 75,720 25.4% 0 0.0% 75,720 25.4% 19.4% (17,751) (17,751) - - - $0.47
FlX 8 142,294 14,509 10.2% 0 0.0% 14,509 10.2% 5.6% (6,567) (6,567) - - - $0.57
tOtal 158 2,968,975 278,216 9.4% 6,400 0.2% 284,616 9.6% 5.1% (134,111) (134,111) - - - $0.55
henDeRSOn SubMaRket
Wh 75 6,283,356 581,721 9.3% 10,000 0.2% 591,721 9.4% 10.8% 57,095 57,095 - - - $0.43
lD 36 1,696,226 459,418 27.1% 13,432 0.8% 472,850 27.9% 26.3% (26,589) (26,589) - - - $0.54
lI 324 3,088,118 597,350 19.3% 0 0.0% 597,350 19.3% 20.2% 25,521 25,521 - - 25,000 $0.72
InC 29 456,976 64,495 14.1% 4,830 1.1% 69,325 15.2% 13.3% (8,618) (8,618) - - - $0.60
FlX 78 1,275,017 274,493 21.5% 0 0.0% 274,493 21.5% 22.8% 15,990 15,990 - - - $1.01
tOtal 542 12,799,693 1,977,477 15.4% 28,262 0.2% 2,005,739 15.7% 16.4% 63,399 63,399 - - 25,000 $0.63 6
nORth laS veGaS SubMaRket
Wh 178 18,748,956 1,940,004 10.3% 528,095 2.8% 2,468,099 13.2% 11.0% (85,957) (85,957) - - - $0.36
lD 168 4,672,500 1,109,974 23.8% 45,964 1.0% 1,155,938 24.7% 21.6% (134,575) (134,575) - - - $0.37
lI 609 6,977,954 1,296,688 18.6% 35,972 0.5% 1,332,660 19.1% 19.0% 5,140 5,140 - - 94,680 $0.46
InC 31 562,095 217,895 38.8% 0 0.0% 217,895 38.8% 36.5% (12,630) (12,630) - - - $0.57
FlX 46 780,909 229,803 29.4% 7,779 0.0% 237,582 30.4% 28.7% (18,612) (18,612) - - - $0.88
tOtal 1,032 31,742,414 4,794,364 15.1% 617,810 1.9% 5,412,174 17.1% 15.2% (246,634) (246,634) - - 94,680 $0.42
nORthWeSt SubMaRket
Wh 5 224,906 132,990 59.1% 0 0.0% 132,990 59.1% 59.1% - - - - - $0.49
lD 1 50,000 0 0.0% 0 0.0% 0 0.0% 0.0% - - - - - $-
lI 17 298,896 52,615 17.6% 4,500 1.5% 57,115 19.1% 20.0% 7,108 7,108 - - - $1.06
InC 4 99,427 40,869 41.1% 0 0.0% 40,869 41.1% 16.7% (24,291) (24,291) - - - $1.09
FlX 55 672,202 214,814 32.0% 0 0.0% 214,814 32.0% 22.2% (65,453) (65,453) - - - $0.98
tOtal 82 1,345,431 441,288 32.8% 4,500 0.3% 445,788 33.1% 26.7% (82,636) (82,636) - - - $0.85
SOuthWeSt SubMaRket
Wh 135 12,559,601 1,344,661 10.7% 444,500 3.5% 1,789,161 14.2% 12.7% (134,036) (134,036) - - - $0.54
lD 184 6,990,703 1,453,124 20.8% 118,153 1.7% 1,571,277 22.5% 21.1% (60,816) (60,816) - - - $0.64
lI 749 9,133,520 1,630,504 17.9% 20,268 0.2% 1,650,772 18.1% 16.0% (184,820) (184,820) - - 80,000 $0.65
InC 120 2,496,381 364,302 14.6% 9,796 0.4% 374,098 15.0% 15.7% 19,691 19,691 - - - $0.71
FlX 101 1,564,088 553,437 35.4% 28,416 1.8% 581,853 37.2% 34.2% (35,282) (35,282) - - - $1.02
tOtal 1,289 32,744,293 5,346,028 16.3% 621,133 1.9% 5,967,161 18.2% 16.7% (395,263) (395,263) - - 80,000 $0.66
WeSt CentRal SubMaRket
Wh 63 1,897,447 56,592 3.0% 0 0.0% 56,592 3.0% 3.0% - - - - - $0.51
lD 36 682,456 113,752 16.7% 800 0.1% 114,552 16.8% 14.3% (32,189) (32,189) - - - $0.55
lI 491 6,656,164 589,487 8.9% 16,604 0.2% 606,091 9.1% 9.9% 64,506 64,506 - - - $0.53
InC 66 2,462,109 379,633 15.4% 0 0.0% 379,633 15.4% 13.7% (41,199) (41,199) - - - $0.76
FlX 12 219,832 34,171 15.5% 0 0.0% 34,171 15.5% 15.5% - - - - - $0.73
tOtal 668 11,918,008 1,173,635 9.8% 17,404 0.1% 1,191,039 10.0% 9.9% (8,882) (8,882) - - - $0.61
M a R k e t tOta l
Wh 556 45,404,605 4,544,579 10.0% 1,028,295 2.3% 5,572,874 12.3% 11.7% 92,779 92,779 - - 78,936 $0.45
lD 512 17,414,601 3,835,900 22.0% 209,802 1.2% 4,045,702 23.2% 21.3% (299,912) (299,912) - - 121,992 $0.53
lI 2,482 30,171,049 4,530,799 15.0% 92,739 0.3% 4,623,538 15.3% 14.8% (118,269) (118,269) - - 199,680 $0.60
InC 354 8,126,232 1,416,941 17.4% 21,134 0.3% 1,438,075 17.7% 16.8% (70,828) (70,828) - - - $0.71
FlX 366 5,962,523 1,716,124 28.8% 53,271 0.9% 1,769,395 29.7% 27.9% (101,171) (101,171) - - - $0.96
tOtal 4,270 107,079,010 16,044,343 15.0% 1,405,241 1.3% 17,449,584 16.3% 15.4% (497,401) (497,401) - - 400,608 $0.59
Q u a Rt e R lY C O M pa R I S O n a n D t O ta l S
Q1-10 4,270 107,079,010 16,044,343 15.0% 1,405,241 1.3% 17,449,584 16.3% 15.4% (497,401) (497,401) 0 0 400,608 $0.59
Q4-09 4,256 107,079,010 15,546,942 14.5% 996,001 0.9% 16,542,943 15.4% 14.2% (815,284) (2,951,893) 495,529 1,790,176 370,608 $0.61
Q3-09 4,244 106,583,481 14,236,129 13.4% 945,745 0.9% 15,181,874 14.2% 13.4% (831,975) (2,136,609) 212,270 1,294,647 590,229 $0.66
Q2-09 4,210 106,371,211 13,191,884 12.4% 1,028,315 1.0% 14,220,199 13.4% 11.9% (1,016,256) (1,304,634) 342,574 1,082,377 712,104 $0.71
Q1-09 4,188 106,028,637 11,833,054 11.2% 744,605 0.7% 12,577,659 11.9% 11.0% (288,378) (288,378) 739,803 739,803 643,955 $0.76
Q4-08 4,168 105,288,834 10,804,873 10.3% 775,544 0.7% 11,580,417 11.0% 10.4% 41,723 (227,364) 495,411 4,443,334 1,109,988 $0.76
the InFORMatIOn COntaIneD In thIS RepORt WaS pROvIDeD bY SOuRCeS DeeMeD tO be RelIable, hOWeveR, nO GuaRantee IS MaDe aS tO the aCCuRaCY OR RelIabIlItY. aS neW, CORReCteD OR upDateD
InFORMatIOn IS ObtaIneD, It IS InCORpORateD IntO bOth CuRRent anD hIStORICal Data, WhICh MaY InvalIDate COMpaRISOn tO pRevIOuSlY ISSueD RepORtS.
294 oFFiCes in 61 Countries on 6 Continents 15
$48. 1 B i l l i o n i n annual trans action Volume | 1 .1 Billion sF Manage d | 1 2 ,7 4 9 Professiona ls