Carson City's industrial vacancy rate improves
NAI Alliance is pleased to report another key sign of recovery: Carson City’s 2011 industrial vacancy rate of 11.43 percent has improved to 7.14 percent as of Dec. 2014.
Surveying 185 qualifying properties is not an easy task, but the industrial vacancy rate is a crucial figure to determining the health of the backbone of our local economy: manufacturing. These primary jobs are absolutely key to retail and office (supporting positions) job creation. The 2009 vacancy rate was 21.5%, so you can see that from a primary jobs perspective, we have made excellent progress in the past six years.
Inclusive of the 185 surveyed properties, there are 4,809,853 industrial sq ft in Carson City. Smaller buildings (generally less than 10,000) were not included. No new industrial buildings have been constructed in over seven years now, and that trend must change in order for the market to remain healthy.
A fundamental of the market is that pricing is driven by supply and demand. In general a vacancy rate between 7-9% reflects a healthy balance, where a tenant and landlord can have a fair negotiation. As the industrial vacancy dips in the next year under 7%, you will see rents and property values continue to rise, and it will soon make sense for new construction to begin.
Another good indicator of the health of the commercial real property market is the velocity of land sales. There was one industrial land sale in 2008, and then none until Dec. 2011... but the velocity of sales has increased, and there were five in 2014.
Once land started moving again, we knew the worst was behind us.