The newest addition of our Market Advisor is out, and with it comes historic news. From an all-time high of 15.61% vacancy in the second quarter of 2010, we’ve rebounded to an historic low of 5.86%. What does this mean for 2018?
From the report:
“In a balanced 8% vacancy market, there is adequate availability for tenants to choose from several location opportunities and negotiate competitive rental rates and lease terms from a few different landlords. However, as the vacancy swings upward or downward, there are definite winners and losers. Our recent quarterly reports have chronicled the steady lowering of vacancy rates. We also described the market as being ‘landlord friendly,’ even at a much higher vacancy. What does this historically low vacancy rate mean for our real estate market? Is it good or bad?
Landlords will certainly enjoy the advantage of negotiating leases with the knowledge that tenant options are limited. Landlords will feel no pressure to aggressively compete for any particular transaction, since there’s likely another one around the corner. This clearly translates into rising rental rates. Beyond that, landlords will not feel compelled to grant shorter lease terms or lease concessions in the forms of free rent, free tenant improvements, or early occupancies. Additionally, landlords are not readily granting many lease language changes. In this market, landlords will simply have no reason to bend very much to secure a bene cial tenant for their vacancy.
What we are experiencing now is the result of a few years of highly successful economic diversification in the area combined with the addition of several huge new industries. Northern Nevada’s economy is at a high level and forecasts see more of the same in 2018. Our previous market report titled “Landlords Rule” will remain the drumbeat for a while.”
Download your free copy of the Market Advisor now for our vacancy analysis, lease rates, market velocity, a submarket statistic breakdown, significant transactions over Q4 and our forecast for the year to come.