Las Vegas industrial real estate is a market driven by the local economy, and that of the South West. Las Vegas is one of North America’s top 40 industrial markets by size, and ranks around the mid-30s most years. If has just over 100 million square feet of industrial properties, of which one third is warehouse distribution. Of these warehouses around 40% can be considered Grade A.
Standards that are required for a Grade A rating in the Las Vegas market are: 30 feet clear height, swap coolers in the warehouse, 3% of roof with sky lights, ESFR sprinklers, docks at grade level, ramps to grade, and 120 feet radius for the loading areas.
A typical Las Vegas warehouse is 100-250,000 square feet, and there are a dozen or so projects in the market of over one million square feet where four or more buildings are together in an industrial park. There are around 12 single buildings in excess of 300,000 square feet, half of which are owner-occupied.
North Las Vegas and the South West are the dominant sub-markets. CBRE divides the market up as per the map on the left, whereas Colliers considers that there are more sub-markets as per the map on the right.
Local distribution is the main segment. The vast majority of industrial space is in place to service Las Vegas, its casinos, retail, tourists and two million residents. Most trucks arrive full and leave empty. The most common flow of traffic is from Southern California via the I15. This is the driver behind the South West of Las Vegas being the primary location for warehousing. Anything past Sahara Avenue and trucks coming from Southern California can’t go and come back in a day.
Las Vegas is located at the southern tip of Nevada in the Great Basin, the western region between the Sierra Nevada and Wasatch mountain ranges. Situated at the hub of an 11-state western region, Las Vegas is an ideal location for industrial business. It is a centralized and logistically appealing location for industrial tenants seeking to distribute regionally throughout the Western U.S. Thus, in addition to servicing the Las Vegas MSA population of 2m and its massive hotel industry, the warehouses are used as regional distribution hubs for the 11 states that can be reached overnight.
South West Distribution Hub
When it comes to regional distribution Phoenix is a cheaper alternative, but it adds two hours journey time to the key destinations. Also Las Vegas has the advantages of a low tax regime, low cost of readily available labor, and low cost of living. Not only is it preferable to Phoenix, it is also a legitimate competitor to Ontario as a redistribution point into Southern California.
Las Vegas’s close proximity and easy access to major markets such as Los Angeles as well as local access to international ports, position it as a key player in trade and commerce. McCarran International Airport (the nation’s sixth busiest airport), the International Air Cargo Center, the Union Pacific Railroad, and the Interstate 15 transportation thoroughfares offer rapid and easy access to trade arteries both domestic and foreign.
Positioned for California Distribution
The Las Vegas International Air Cargo Center at McCarran International Airport, located eight miles south of downtown Las Vegas, has positioned the city and surrounding area as a major West Coast air-truck distribution center. The Cargo Center is less than one mile from a major interstate highway and railroad access. Additionally, plans are on place to build a California-Nevada Interstate Maglev line from Las Vegas to Los Angeles to provide a faster and more direct route to the sixth largest economy in the world.
The CANAMEX Corridor of Innovation
One other factor to consider in the Las Vegas industrial real estate market is the Canada-American-Mexico Corridor of Innovation, also known as the Smart Corridor, or CANAMEX. The CANAMEX Corridor of Innovation is an initiative to improve public and private shipping, rail, highway and inspection facilities through a multi-state cooperative of Arizona, Nevada, Utah and Idaho. Whist most truck and freight train traffic currently runs east and west, CANAMEX aims to free up north-south trade in North America and more efficiently reach out to the Far East.
Las Vegas could become a major distribution hub on the transportation route between Canada, Mexico and the United States as the $4 billion worth of highway improvements are deployed, including the Hoover Dam bypass, which is underway.
United States Highway 93 (U.S. 93), which cuts through Las Vegas, has been designated a North American Free Trade Agreement (NAFTA) route. The increasing congestion caused by the switchbacks leading to the Hoover Dam site and the restrictions at the dam crossing have led to the development of the Hoover Bypass Project. The Hoover Dam Bypass Project is a 3.5-mile corridor beginning at approximately milepost 2.2 in Clark County, Nevada and crossing the Colorado River approximately 1,500 feet downstream of the Hoover Dam, then terminating in Mohave County, Arizona near milepost 1.7 on U.S. 93. Once these road improvements are complete it will provide a further boost to Las Vegas Industrial real estate.
