Northern Nevada Industrial Real Estate Maintaining Pace in Third Quarter
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From the report: “Our market’s first quarter statistics for 2018 were not too exciting. The second quarter came roaring back with thriving leasing activity, and while Q3 has been able to maintain that brisk pace for another quarter, the numbers were achieved in an unusual fashion. One of the less reported factors in market activity is the return to market category. In Q3, this category alone propelled the overall quarter numbers to achieve well above actual market performance. Typically, this market returns about 1,000,000 SF of inventory quarterly. In fact, in the past two quarters, we saw returns of about 1,400,000 SF. In Q3, we only returned 750,000 SF, which is roughly half of the previous two quarters. This has a strong impact on the overall market net absorption.
Gross absorption was actually slightly below the five-year average, coming in at 1,586,831 SF, and with only 29 transactions. By comparison, the second quarter of 2018 had gross absorption of 2,215,863 SF. However, even with the modest gross absorption, the low returns to market produced a quarterly net absorption of 836,265 SF, just slightly more than Q2’s strong numbers and well above the five-year average. Vacancy in Q2 was 6% and Q3 produced the exact result, a 6% vacancy. Certain sizes, however, vary significantly from this 6% vacancy, with much more abundant offerings in some size ranges and far fewer in others. For a deeper understanding of this topic read our Northern Nevada Business View article, which explains the importance of overall vacancy rates.”
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