Northern Nevada’s industrial construction market faces a steep decline, with new industrial square footage under development dropping roughly 82% from prior peaks. This marks a sharp pullback in a once-booming logistics and industrial hub. Vacancy rates now exceed 11%, as new Class A buildings outpace tenant demand.
Key Market Drivers
Rising vacancies and flat rents stall new projects. Industrial vacancy hit 11.3% in late 2025, up from under 1% in 2022, after a post-pandemic building rush. Experts note projects often reach pad-ready stages but halt due to weak absorption. Land deals shifted to data centers rather than traditional warehouses, signaling caution.
Logistics Sector Impact
Logistics and distribution face headwinds from U.S. trade policies. Tariffs on Far East imports squeeze tenants reliant on West Coast shipping routes. Northern Nevada’s prime location is losing its edge as costs align with rivals’. Leasing lags, with brokers like NAI Alliance forecasting stagnant starts through 2026.
Development Pipeline Status
Over 20.8 million square feet remains entitled or planned. Phased sites like Victory Logistics District prep land, but pre-leasing precedes shovels. Firms such as Panattoni and Mark IV Capital pause amid uncertainty. Q3 2025 reports show Reno holding steady despite national slowdowns and rates.
Outlook for Recovery
Absorption could clear excess supply in 1-2 years, restarting cycles. Strategic spots retain appeal for logistics, though tariffs cloud timing. Northern Nevada industrial construction may rebound by 2027-2028 as inventory tightens.
This Northern Nevada industrial slowdown underscores broader shifts in the logistics market. Stakeholders closely watch vacancy trends and policy changes for signs of a pickup.
