A warehouse isn’t exactly the most exciting piece of real estate. As a developer told me years ago, it’s just four walls with a lot of air between them.
But these facilities are a hot segment of the Southern Nevada real estate market, as builders put up waves of projects and landlords pay big bucks to own them.
Amazon has been one of the main reasons for the growth – and if you want a glimpse of the e-commerce giant’s impact on local real estate and the booming industrial market as a whole, venture close of the Las Vegas Motor Speedway.
Developers have recently packed the Speedway area with big warehouse projects, and at least three Amazon facilities have traded hands there in the past five years. Amazon’s buildings all sold out about a year after they were built – and prices skyrocketed.
Most recently, a Boston investment firm acquired an 857,000 square foot Amazon warehouse for $226.4 million in April as part of a two-building acquisition along Tropical Parkway off the Interstate. 15, according to property records.
By comparison, in late 2017, an 813,000 square foot Amazon facility sold for $73.4 million in a two-building purchase along I-15 on Lamb Boulevard.
Amazon’s facilities are by no means the only warehouses to trade hands lately in southern Nevada, and the retail powerhouse is one of many companies to take up new industrial space in the Valley.
But Amazon’s expansion in the region and the prices investors have paid to own its buildings highlight a rapidly growing commercial real estate sector — a market fueled in large part by an accelerated shift to online shopping. line that generated a request for distribution space.
Cushman & Wakefield broker Greg Tassi, an industrial property specialist, said investor activity overall is “extremely active” for warehouses in southern Nevada.
He saw record sales prices and noted that land values accelerated.
“The industrialist is a bit of a darling right now,” Tassi said.
Amazon, which has hundreds of distribution facilities in North America, had 13 operating sites in Nevada as of last fall.
Some are right next to each other. Amazon has several large buildings near the Speedway, and in Henderson it has a 147,000 square foot distribution facility across the street from an Amazon facility that spans over 600,000 square feet.
Amazon declined to comment for this story.
Overall, more than 8 million square feet of industrial space was under construction in the Las Vegas area in the first quarter, up from 5.45 million in the same period last year, and the rate of Market vacancy fell to a record low of 1.7%, brokerage Colliers International reported.
Southern Nevada also saw $608.4 million in industrial investment sales in the first quarter of this year, on pace with sales volume of $1.6 billion in 2021, according to Colliers.
Of course, not all areas of commercial real estate are so heated. A while ago, physical retail became faltering as people spent more time shopping on websites such as Amazon, and the office market still faces questions over two years after the pandemic triggered widespread work-from-home arrangements.
But as long as people continue to buy things from the comfort of their sofas, don’t expect the Las Vegas warehouse market to slow down anytime soon.
Remember that these things are shipped to you from somewhere.