The Las Vegas industrial market demand slowed in the second quarter of 2016 from the previous quarter, according to a report from Colliers International’s Las Vegas office.
According to the report, demand remained positive with net absorption of 833,697 square feet, though that number was lower than the previous quarter’s net absorption of 900,947 square feet.
The current quarter’s net absorption was also lower than the same time last year when Las Vegas had an absorption of more than 1.8 million square feet in the second quarter of 2015.
The report, however, did also notate that “one quarter does not indicate a trend.”
There were no projections on what the second half of 2016 will bring.
The weighted average asking rate also fell to 62 cents per square foot from the first quarter’s 65-cents-per-square-foot marker. That decrease also marks the end of a seven-quarter streak of positive gains for asking rents, where the weighted average asking rent was 52 cents per square foot in the second quarter of 2014, according to a Colliers International report.
The Las Vegas industrial market expanded by 661,726 square feet in the second quarter, which equates to nearly 1.8 million square feet being constructed in 2016, in total. That equates to the largest quarterly expansion since the first half of 2008 — just following the Great Recession, according to the report.
Currently under construction is 1.9 million square feet of industrial space. If this space is brought online without any leasing, the city’s vacancy rate would only rise to 7 percent, the report noted. That calculation didn’t include the regular ebb and flow of the industrial market’s vacancy rate.
Vacancy reduced in the second quarter of 2016 to a total citywide average of 5.5 percent, from the first quarter’s 5.6 percent.
The first quarter of 2016 saw the first increase in average vacancy rates in the Las Vegas industrial market in four years. That quarter was a rise from the fourth quarter of 2015’s 5.5 percent average vacancy.
Nonresidential and residential construction levels fall
Residential and nonresidential construction numbers fell in Clark County, according to a recent report.
Dodge Data &Analytics’ report on June construction starts in Clark County’s nonresidential sector showed a decrease of 71 percent over the same month in 2015. The 2016 numbers show nonresidential starts totaling just over $100 million in June — falling below June 2015’s nearly $345 million.
Residential construction starts also fell in June by 21 percent, according to the report. In dollars, that equated to a fall of nearly $40 million, from June 2015’s starts valued at more than $186 million to 2016’s more than $147 million.
The combined market had 53 percent less construction starts in June — over the same period in 2015. There was a total value of nonresidential and residential construction starts of more than $247 million in June, with $531 million in June 2015.
The year-over-year analysis also showed a loss with the combined totals of construction starts in nonresidential and residential — equating to a 13 percent loss. The total values went from more than $2.3 billion in 2015 to $2 billion in 2015 in a year-over-year analysis.
The residential construction sector alone was the only market that increased in construction starts in a year-over-year analysis, increasing by 17 percent with $1 billion in starts in 2015 and more than $1.2 billion in starts in 2016, according to the report.
Nevada in top 10 for improvement in construction unemployment
The state was tied for seventh in the best improving state in construction unemployment based on a year-over-year analysis, according to recent data from the Bureau of Labor Statistics.
The June unemployment levels in the construction sector totaled 5.8 percent over June 2015’s 8.2 percent. That 2.4 percent drop equaled Delaware’s reduction rate, which put the region at a 3.8 percent unemployment rate.
On the national side, June’s not seasonally adjusted construction unemployment rates fell in 47 states, according to an analysis of data from the Bureau of Labor Statistics by the Associated Builders and Contractors. In a year-over-year analysis, the national unemployment rate in the construction industry fell by 1.7 percent to 4.6 percent.
“The drop in the construction unemployment rate from June 2015 extends the uninterrupted monthly sequence of year-over-year rate decreases that started in October 2010,” said economist Bernard M. Markstein, Ph.D., president and chief economist of Markstein Advisors, who conducted the analysis for ABC.
Nevada ranked No. 40 on a state-level analysis with its 5.8 percent construction unemployment rate.
The state with the lowest unemployment in construction was Vermont at 1.9 percent, followed by Colorado. Idaho and Iowa tied for the No. 3 space and Nebraska followed those two states.