The Las Vegas industrial market has experienced a slowdown over the last 18 to 24 months, however there are some potential bright spots ahead, according to one of the top commercial brokers in the valley.
Approximately 8 million square of new industrial space was delivered in the last 18 to 24 months, which caused overall vacancy to peak at 10.1 percent in the third quarter of 2025, said Jerry Doty, a vice chair with Colliers Las Vegas. The historic low for vacancies was just 1.3 percent in 2022, he said.
This sharp jump in industrial vacancy was caused by both a wave of new supply hitting the market simultaneously with a cooling of demand, specifically from larger e-commerce, third-party logistics, and distribution tenants who had aggressively expanded into Southern Nevada during the post-pandemic boom, he said.
However, there have been bright spots during this slowdown over the past four quarters. Local companies accounted for 43.3 percent of all leased square footage, the single largest tenant segment in the market, outpacing Midwest-based companies (15.3 percent), Southwest regional firms (11.6 percent), and Mid-Atlantic tenants (8.3 percent).
Doty said the Southwest submarket in the Las Vegas Valley — where a large percentage of these local companies are located — reflects this strength with a vacancy rate of just 6.2 percent and 530,270 square feet of net positive absorption in the first quarter of 2026 alone, which puts it among the best-performing submarkets in the valley.
Doty took some time to further explain the industrial market in Las Vegas, including tenant demand, vacancy rates and where the industry is most likely headed in the future. This conversation has been edited for length and clarity.
How has tenant demand shifted in Las Vegas, and any stats to back this trend up?
While the majority of absorption over the last few years had been driven by large big-box deals — primarily in the North Las Vegas submarket, which holds 78.2 million square feet of the valley’s 188.9 million total inventory — we have seen that trend shift meaningfully toward mid-bay and light distribution tenant sizes. The median lease size across the most active submarkets reflects this clearly: the Southwest submarket’s median deal was just 5,421 square feet in the first quarter of 2026, while East Henderson’s median came in at 5,539 square feet. These are fundamentally different transactions than the 300,000-plus square feet of bulk warehouse commitments that dominated headlines during the boom years.
This shift ties directly to the more local nature of current demand with significant activity from trade show and events support, food service, and construction materials and supply companies. All of these industries are direct beneficiaries of a functioning Las Vegas economy. When conventions return, when restaurants are full, and when residential and commercial construction continues, these tenants grow.
There were really high industrial vacancies that are now being leased up. What does the pipeline look like for construction?
As vacancies increased, we did see construction slow significantly — a sign of a market correcting itself responsibly. However, while there is still 13.2 percent availability in the North Las Vegas submarket, representing the bulk of the valley’s unoccupied large-format product, it will likely be some time before we see new construction increase significantly in that corridor. The more telling signal may be that the first quarter of 2027 currently shows zero new deliveries scheduled — meaning the market is essentially hitting a full pause on new supply, which sets up a potentially very different conversation about availability heading into 2027 and 2028.
Where does Las Vegas’ future lie regarding industrial expansion, construction and tenant leasing? Any subsectors booming?
Except for some small infill parcels, the majority of new construction will be taking place in the Apex (Industrial Park) submarket in North Las Vegas. Currently, there is 19.3 million square feet of planned product in Apex. For the next phase of industrial construction, Apex will clearly lead the charge, continuing its emergence as Southern Nevada’s primary large-format logistics node.
However, if industrial developers are able to unlock Bureau of Land Management land on the south side of Las Vegas along the I-15 corridor, there is a high probability of a significant new growth frontier emerging. With no clear regulatory path currently established, that opportunity could still be several years away — but it represents perhaps the single most consequential land decision for the long-term future of Southern Nevada’s industrial market. Until that unlocks, Apex remains the only viable destination for large-scale new industrial development in the valley.
What is the biggest challenge and hurdle right now facing the industrial commercial sector in Las Vegas?
The biggest immediate challenge facing the Las Vegas industrial market is the current oversupply of big-box warehouse space, specifically concentrated in the North Las Vegas submarket. With 78.2 million square feet of total inventory and a 10.7 percent vacancy rate, North Las Vegas is carrying approximately 8.4 million square feet of vacant large-format product — representing roughly 3 years of supply at historic absorption rates. The submarket posted negative absorption of 591,201 square feet in the first quarter of 2026 alone, and with 1.18 million square feet of additional sublease space also available in that corridor, the path to stabilization will require a meaningful uptick in large national and regional requirements coming to Southern Nevada. While the improving absorption trend — up 308 percent year-over-year across the broader market — suggests that day is coming, it will take time.
The longer-term challenge is arguably more structural: the simple lack of developable land, specifically in the southern part of the valley. Industrial growth along the I-15 South corridor is effectively gated behind BLM-controlled land that requires federal legislative action to release for private development — a process that has no clear timeline and has historically taken years if not decades to navigate. Until that land becomes available, Southern Nevada’s industrial footprint will continue its march northward toward Apex, where the valley’s only meaningful large-scale development pipeline currently exists. For developers, tenants, and investors alike, the Las Vegas industrial market’s geographic future is increasingly being written in one direction — and it points north.
Contact Patrick Blennerhassett at pblennerhassett@reviewjournal.com.
