Spring ’09 Market Update
Current Market: The short version is: The dull national economy continues to influence our lo-cal market with annual gross absorption of 3.5 million sf; just 70% of annual averages. Vacancy is at an all time high at 13%, leasing activity is down 30%. New speculative construction has ground to a halt. Asking rates on new space have softened, firms moving into the area are finding excellent deals when developers have competed for solid, credit the tenants that are out there. Some submarkets have extremely high vacancy rates while others are more in balance. The I-80 east corridor, for example has a 25% vacancy, while the Stead submarket is slightly over 12%. Either of these markets provide excellent buying opportunities for big box tenants. The industrial portfolio investors are patient and we are not anticipating market asking pricing dipping lower than they already are now. Reno’s overnight/next day distribution to the 11 western states remains a strong factor for relocations with tax advantages, friendly business climate, favorable weather, high availability of trucking and reasonable workmen’s comp rates closely following. Tho the economy is a bit dull now, the continually escalating cost and burdens of doing business in California continues to funnel a steady stream of business to Nevada. Midwest and Eastern firms seeking western distri-bution hubs is also a strong market for Reno’s growth.