Experts eye industrial market

Demand for industrial space in Southern Nevada has been fueled chiefly by its business-friendly environment and location, according to Donna Alderson, an executive with CB Richard Ellis in Las Vegas. In fact, she said a significant number of manufacturers and distributors have opened shop locally to escape the high cost of doing business in states such as California.

"There has been a definite increase in activity from companies that are located outside the state and investigating (Southern Nevada) as a viable location for either relocation of existing manufacturing facilities or as a regional expansion for distribution," Alderson said.

"(The area's) central location as a hub of 11 Western states is an important selling point to companies looking at this market. Logistically, (it) sits in the middle of the Western U.S. with overnight access to 40 million customers. And because of our large resort industry, (it) typically has more freight arriving than leaving, resulting in favorable outbound shipping conditions."

North Las Vegas, in particular, has attracted a number of the commercial realty firm's clients. One of the largest submarkets in the Las Vegas Valley, the city has nearly 20 million square feet of industrial space; about 2.5 million square feet is vacant.

Two newcomers to the submarket are CPI Card Group, a producer of plastic credit, phone and gift cards, which moved its operations from Los Angeles this year; and Artesian Spas, which will move its manufacturing facility from Southern California to a new 100,000-square-foot building in the Lamb Business Center. Construction of the building will start later this summer.

Among the active industrial developers in the northern valley is DP Partners, a developer of office, warehouse, manufacturing and distribution space. The company retained CB Richard Ellis to handle leasing activities for its portfolio, which includes 3 million square feet plus 2 million square feet planned for development. Included are the 2.1 million-square-foot LogistiCenter and the 430,000-square-foot Nellis Industrial Park, both located near Interstate 15 and Craig Road; and the 2.1 million-square-foot Dermody Business Center near Cheyenne Avenue and Lamb Boulevard.

The valley's southwest corridor along Interstate 215 has emerged as a "dynamic" submarket for industrial space, according to Derek Rafie, a CB Richard Ellis associate. The area comprises 25.6 million square feet with a 6 percent vacancy rate and is the largest submarket in the valley.

"It has the highest concentration of space and is experiencing the highest demand with the highest lease rates and land values," Rafie said.

Among the new projects in the area is Blue Diamond Business Center, a 110-acre business park on Blue Diamond Road between Valley View Boulevard and Arville Street. The first phase of the 1.5 million-square-foot office/warehouse has been completed.

On the drawing board is Blue Diamond Crossing, a 650,000-square-foot retail facility, to be built next to the business center. Anchored by a Target store, construction is scheduled to start in second-quarter 2005 and will be concurrent with the widening of Blue Diamond Road and construction of the Blue Diamond Road/Interstate 15 interchange. Completion is expected in third-quarter 2006, according to Rafie.

In the southeastern valley, Henderson has 8.8 million square feet with a 90 percent lease rate. Many of the larger spaces, Alderson said, have been absorbed. Construction activity includes an 86,400-square-foot building for an out-of-state manufacturing company. Located in ProLogis Park Henderson, the project is expected to be completed in November. The developer, ProLogis, owns and manages 2.3 million square feet of industrial space in Southern Nevada.

Real Estate home