Q1 2025 Northern Nevada Industrial Market Update

Insights, data, and what to watch next in our region’s fastest-growing sector.

Introduction
Welcome to our very first market update blog! Each quarter, we pull together the key metrics—absorption, vacancy, rental rates, supply pipeline—to help tenants, investors, and developers understand where the Northern Nevada industrial market is headed. Below is a quick recap of Q1 2025 highlights, followed by our take on what’s driving these trends and how to position yourself for the rest of the year.

Q1 2025 by the Numbers

• Net Absorption: 1,073,460 SF of positive absorption in Q1

• Vacancy Rate: 11.4% (down 40 bps QOQ, up 480 bps YOY)

• Average Asking Rent: $0.86 PSF NNN per month

• Under Construction: 1,985,033 SF

• YTD Completions: 710,352 SF delivered

What Moved the Needle in Q1

• Strong Tenant Demand

  Leasing activity surged 70% YOY to 2.45 MSF, with 25% of deals exceeding 50,000 SF

  Sublease spaces drove most of the growth—accounting for 70% of activity—as large users sought faster occupancy and lower fit-out costs.

• Vacancy Dynamics

  Vacancy dipped 40 bps from Q4 but remains elevated at 11.4%, reflecting the 4.8 MSF of deliveries over the past year

  Sublease vacancy fell to 1.1%, thanks to absorption at key districts like Victory Logistics and 6125 Echo Avenue.

• Rent Movements

  The NNN average asking rate slipped $0.07 QOQ to $0.86 PSF—bulk warehouse rates bore the brunt, while flex space held steady at $1.31 PSF

  Land scarcity near I-80 and Sparks continues to underpin rental growth longer term.

Market Drivers & Outlook

• Supply-Chain Resilience: Northern Nevada’s pro-business climate, freeway and rail access, and expanding labor pool keep it top-of-mind for e-commerce and logistics users.

• Construction Discipline: With $2.0 MSF under construction—but only ~710k SF delivered so far—developers remain cautious amid rising build costs.

• Financing Trends: Stable borrowing costs have supported user expansions; any rate cuts later in 2025 may spur more speculative ground-breakings.

Looking Ahead:

• Rent Growth: Expect 3–5% annualized rent gains if deliveries remain moderate.

• Vacancy Pressure: More completions in Q2 may nudge vacancy higher unless demand stays robust.

• Investor Interest: Strong buyer appetite could compress cap rates further, especially for last-mile and build-to-suit assets.

How to Leverage These Trends

• Tenants: If you’re planning expansion or relocation, now’s the time to lock in space and favorable terms.

• Owners/Developers: Explore value-added opportunities to reposition older assets to meet the demand for modern logistics specs.

• Investors: Focus on high-growth submarkets—Fernley, North Valleys, Storey County—that led absorption in Q1.

What’s Next?
Our Q2 update publishes in early July, with a deep-dive on new deliveries, submarket shifts, and emerging user profiles. Until then, reach out anytime for site selection, leasing strategy, or investment analysis.

About Amanda Eastwick, SIOR, CCIM
As your Northern Nevada industrial specialist at Cushman & Wakefield, I combine market data with local insights to craft tailored real estate solutions. Let’s talk about how these Q1 trends impact your next move.

References:
Q1 2025 Cushman & Wakefield Northern Nevada Market Beat: https://www.cushmanwakefield.com/en/united-states/insights/us-marketbeats/us-industrial-marketbeat