Thursday, July 20, 2017 | 2 a.m.
Beset by damaging economic news in recent weeks, North Las Vegas can find comfort in its continuing industrial real estate boom.
The announcement by embattled carmaker Faraday Future that it would halt plans to build a 3.4-million-square-foot manufacturing plant at Apex Industrial Park dealt a significant blow to economic development plans in North Las Vegas. City officials recruited Faraday to North Las Vegas and shepherded legislation at the state level to attract the company, whose economic troubles prompted the step back.
Officials expected Faraday to attract suppliers and parts-makers for its cars to Apex, helping to secure needed infrastructure improvements at the site. Donna S. Alderson of real estate brokerage firm CBRE said many of those companies investigated Apex but were waiting until Faraday committed to do so themselves.
“They looked, but they didn’t pull the trigger,” Alderson said.
The city still can rely upon burgeoning growth in industrial real estate led by e-commerce companies’ need for warehousing space. A recent report compiled by CBRE shows nearly 2 million square feet of net absorption in the industrial sector in North Las Vegas through July, with more than 3 million additional square feet under construction. The latter figure represents roughly two-thirds of current industrial construction in Southern Nevada.
Despite that prodigious construction rate, few industrial buildings in the city sit empty. The vacancy rate in North Las Vegas stands at 4.3 percent, right in line with the average for the valley.
"With millions of square feet of warehousing and logistics operations already online and millions more square feet under construction, North Las Vegas has become the e-commerce capital of the southwestern United States and an economic driver that's diversifying the state economy and putting thousands of Southern Nevadans to work,” North Las Vegas spokeswoman Delen Goldberg said.
Amazon, Walmart, Fanatics, Bed Bath & Beyond and The Honest Company are some of the largest companies with warehousing space in Southern Nevada.
The North Las Vegas area in particular attracts companies with the lowest asking lease rates in the valley at an average of 45 cents per square foot per month. Convenient access to Interstate 15 from California, where three deep-water ports sit within a day’s drive, also works in the city’s favor. Most of the new industrial growth in the city can be seen from the freeway.
Growth in North Las Vegas and throughout the valley eventually could reach a stasis point as the e-commerce trend evens out, but analysts do not expect that to happen in the near future. David Egan, Americas Head of Industrial and Logistics Research, said at the national level, demand for space has outpaced supply for at least six years.
“We actually could use a little bit of a slowdown,” Egan said.
CBRE Executive Vice President Kevin J. Higgins cited Phoenix, Salt Lake City, Reno and the Inland Empire area of Southern California as primary competitors for warehousing business.
The average industrial build is roughly 300,000 square feet and up to 90 percent of the construction is speculative. Most developers have no trouble finding lessors in this hot market, though — 65 to 70 of the new space being built is absorbed before the building is complete, Higgins said.
Higgins also pointed to the restart of the Resorts World development on the Strip and the upcoming Raiders stadium project as drivers of a need for more midsized warehousing space in Southern Nevada.