The Market Has Moved - But Not Everyone Got the Memo
Northern Nevada’s industrial market is shifting.
After years of record-setting absorption, tight inventory and rising rents, the last twelve months have brought something we haven’t in a while: available space. Vacancy is climbing, sublease signs are going up and landlords are offering concessions we haven’t seen in years - free rent, increased TI allowances and flexibility on term length.
But here’s the twist: rents haven’t dropped. Not yet, anyway.
A Market in Transition
We’re at a moment where supply has caught up to demand, and in some cases, outpaced it. New construction delivered in late 2023 and early 2024 is sitting longer than expected. Institutional landlords are still aiming for proforma lease rates set 12-18 months ago, while local tenants are running numbers with a 2017 mindset - expecting discounts, leverage and aggressive deal making.
It’s created a market disconnect:
Landlords and sellers are pricing deals like it’s still 2023
Tenants and buyers are evaluating deals like it’s 2017
And both are frustrated by the stalemate.
Where the Deals are Happening
Despite the standoff, deals are happening. But they’re happening in spaces where one side is willing to acknowledge that the landscape has changed.
We’re seeing:
More months of free rent baked into LOIs
Higher TIs for build-to-suits and office upgrades
Creative term structures for tenants who need flexibility
Seller financing and price adjustments for user sales
In short, the smart players - on both sides - are adapting.
What This Means for Users & Investors
If you're a tenant looking to lease space:
Now’s your chance to negotiate terms we haven’t seen since the late 2010s. Be prepared to move with clarity and intent - landlords are more flexible, but they’re still looking for qualified, committed tenants.
If you're a landlord or seller:
The market is not collapsing, but it is correcting. Holding firm on 2023 pricing while vacancy ticks up is a long game with real holding costs. A realistic offer today may be better than chasing a perfect one next quarter.
My Take
We’re not in a downturn, we are in a recalibration.
And Northern Nevada remains a strong market with excellent fundamentals: no state income tax, strategic location and transportation advantages and a rapidly diversifying industrial base. But pretending it’s still 2023 doesn’t help anyone move forward.
If you’re looking to make real estate decisions based on what’s actually happening - not just headlines or spreadsheets - I’d be happy to grab a coffee and talk through your strategy.
The market’s moving. Let’s move with it.
