Northern Nevada’s Industrial Market: What Tenants Should Know in 2025
If you’re negotiating or evaluating industrial space in the Reno/Sparks market this year, you’ll want to know where things stand - and what lies ahead. The fundamentals in Northern Nevada are shifting, and being prepared can give you leverage as a tenant. Here’s your guide to the key trends, market drivers and strategic questions you should be asking now.
1. Market Snapshot & Trends
After a sluggish stretch, the industrial market in the Reno-Sparks area is showing signs of rebound. In Q1 2025, the region posted +3.1 million sq ft of net absorption, the highest since early 2022.
Vacancy rates, while still elevated, are coming down. Q2 2025 saw a vacancy rate of around 10.5%, dropping from a recent high of ~12.1%.
Average asking lease rates have remained relatively flat in the short term, Q2 had an average of +/-$0.80 NNN per sq ft.
Sublease space remains a wildcard. A growing volume of sublease inventory is affecting landlords’ leverage and creating alternative opportunities for tenants.
2. What’s Driving Demand & What’s Holding It Back
Key growth drivers:
Northern Nevada’s strategic location (interstates, proximity to California markets) continues to attract logistics, distribution and manufacturing users.
Diversification of the economy—with advanced manufacturing, tech and supply-chain firms adding footprint in the region—strengthens long-term demand.
Institutional investor interest remains present, signaling confidence in the market’s future.
Key headwinds & risks:
Although vacancy is improving, it remains elevated compared to the historically tight market. That means landlords may have less room to push aggressive rent increases immediately.
New construction is still being delivered, which—if not sufficiently pre-leased—could weigh on availability and lease terms.
Macro factors such as tariff uncertainty, elevated interest rates and global supply-chain shifts are adding caution to leasing decisions.
3. What Tenants Should Focus On Right Now
Lease Term & Flexibility
With availability higher and landlord leverage slightly lower, this may be a moment to negotiate favorable terms for yourself—flexibility around expansion, roll-over options and TI (tenant improvement) allowances matter.
Location & Infrastructure Fit
Choose your location with an eye toward long-term use. If your operation is manufacturing, power, slab strength and zoning matter. If logistics/distribution, proximity to truck courts, interstate access and clear height matter. For flex/office-industrial hybrids, think about adaptability. In Northern Nevada that means evaluating submarkets like South Reno, Sparks or the North Valleys in light of your operational drivers.
Sublease and Plug-and-Play Options
Given excess sublease inventory, some spaces may offer quicker access, built-in infrastructure and cost advantages—but also possible trade-offs (condition, control, landlord motivations). It’s worth comparing full lease vs sublease possibilities.
Entitlement, Supply & Future Moves
If your business expects growth, lock in rights now: expansion rights, options to renew, and ability to relocate internally. Also monitor new supply—while construction continues, strategic timing and commitment matters.
Cost of Occupation
Beyond base rent, consider total occupancy cost: NNN charges, utility loads (especially manufacturing), parking/trucking access, workforce availability and even housing/labor market pressures locally.
4. Strategic Takeaway for 2025
The Northern Nevada industrial market is entering a more balanced phase—not the frenzied landlord-advantaged market of a couple years ago, but one where strong tenants who come prepared can negotiate favorable outcomes. If you’re looking to lease industrial space in 2025, your best position comes from marrying your operational needs (growth, workflow, logistics) with market timing (availability, competition, incentives).
As a tenant representative in this region, I’m seeing opportunity for companies to capture value, whether through strategic positioning, thoughtful lease terms or taking advantage of sublease inventory. But the window of advantage may not last indefinitely. Developments are arriving, capital is active and competition remains.
If you’re ready to explore industrial space in Reno/Sparks or want help refining your site criteria, understanding current lease benchmarks or negotiating the smartest terms - I’d be glad to collaborate. At Miller Industrial Properties, we focus exclusively on industrial tenant representation, and we’re geared up to help you move forward confidently in this evolving 2025 market.
