Industrial space in Carson City is beginning to fill, and some observers think it's time for some speculative building to take place.
The demand for space from industrial users could rise sharply and quickly when the uncertainties surrounding Nevada's tax picture are resolved.
No one tracks vacancy rates in the Carson City industrial market a market of 5.5 million square feet of space in about 160 buildings but realty agents who specialize in industrial leasing say small spaces are becoming particularly hard to find.
Kris Holt, who leases and sells industrial space in the capital region for Grubb & Ellis Nevada Commercial Group, said last week that he sometimes has difficulty finding 10,000- to 20,000- square-foot industrial spaces the sort of space that accounts for much Carson City's existing manufacturing business.
"You play off your base family-oriented, five- to 35-employee operations," Holt said.
Dick Silvera of Silvera Commercial Real Estate based in Gardnerville said he sees a need for even smaller spaces 5,000 square feet or less for start-up and other tiny manufacturing operations.
"We are running out of industrial space," he said.
Even though the slow national economy means few new companies have launched manufacturing operations in the Carson City area, there's still a lot of activity among existing companies.
They grow and need more space or downsize and look for smaller quarters, Holt said.
But the net effect has been absorption of more space.
The existing space in the market could disappear quickly if demand from outsiders rise and that may be about to happen.
Bruce Robertson of Gold Dust Commercial Associates, a Carson City real estate company, said his company has talked with a number of companies looking to relocate to the area.
A good number of those companies, he said, have delayed decisions until the state's tax debate is resolved.
Holt, meanwhile, said rising taxes and workers compensation rates in California continue to create demand for manufacturing space in Carson City.
"It has a lot of people sniffing around, looking at the area," he said.
"Carson City still has the upper hand when it comes to manufacturing.
Manufacturers like to be around each other." So far, however, developers haven't announced plans to build industrial space.
"There's absolutely no spec building going in the industrial area," said Silvera.
The economics for developers are slightly different in Carson City than elsewhere in the region, Holt said.
Industrial buildings tend to be smaller than the behemoths constructed in the Reno/Sparks area, and that means rents need to be a tad higher.
At the same time, land supplies are tight.
Holt estimated only about 700 acres of vacant land zoned for industrial uses remains in Carson City.
In the past, developers who build and lease industrial space played a relatively small part in the Carson City scene.
Nearly two thirds of the industrial properties in the region are owned by the companies which occupy them.
