Carson City’s industrial real estate vacancy rate is tightening to near 7 percent, Andie Wilson, an owner and broker at the local NAI Alliance office said Thursday.
She said the rate, which was determined after a survey of 185 qualifying properties, was a drop of more than four percentage points from the vacancy level here in 2011.
“The industrial vacancy in 2011 was 11.43 percent,” the commercial realtor said, “so today’s 7.14 percent reflects a significant improvement that is in line with the slow, steady improvements we’ve predicted and seen.”
Wilson called it great news, expressing her excitement while acknowledging the market likely will tighten more in 2015 and turn into a landlord’s market as vacant space dwindles.
“It’s not bad news yet,” she said, speaking of the industrial site-seeker’s situation, “but it’s going to be bad news in the next year or so. We’re right there.”
She said the standard is people seeking sites and those with open industrial space can negotiate good landlord/tenant deals until vacancy dips well below 7 percent, and that day is coming soon in the state capital. She said there are a couple of big properties in escrow and things are moving forward.
When matters tighten more, Wilson indicated, a revival of industrial construction might follow. She said in part that’s because now you need a tenant in hand to get financing for industrial construction, which accounts for the malaise in building of such properties over recent years. “That’s why we haven’t seen any new (industrial) construction for the past six years,” she said.
NAI also is in the process of doing retail and office vacancy studies, she said, and obtaining similar residential housing vacancy information from a Reno appraisal firm. But her focus was on the industrial news Thursday. She said the industrial vacancy rate is considered key to whether an economy is ailing, marginal or healthy from her perspective, so a tightening rate is “most important.”
Carson City is often viewed by many mainly as a government and health care community, but it also has more than 100 manufacturers in a light industry sector that was in sound shape for years. The recent recession took a toll, but there has been some recovery of late. Such stirrings came even before Tesla Motors’ battery factory going into Storey County sparked interest in Northern Nevada as a potential tech and industrial haven.