Business Climate and Proximity
Transforming Las Vegas into Key Logistics Hub
Published March 3, 2020
What types of developments does Panattoni focus on nationally, as well as in the Las Vegas market?
Panattoni Development Company, Inc. specializes in industrial, office and build-to-suit developments internationally. Our 24 offices in the United States, Canada and Europe are responsible for development of over 376 million square feet. In Las Vegas, the company has developed more than 5.2 million square feet most recently. These developments include the acquisition of the Las Vegas campus of International Game Technology (IGT), and several ground-up developments, including Henderson Freeways Crossing, Jones Corporate Center and South 15.
International Gaming Technology's Las Vegas campus.
"Today, the Las Vegas market rivals Reno in terms of the size of the average speculative building being constructed."
With your focus being on the Reno-Las Vegas-Phoenix region, what are the striking differences that you see between these markets that determine the types of developments that Panattoni pursues in each of these areas?
You could assume that the larger size of the Las Vegas market would demand larger facilities. Up until recently, the opposite has been true. In general, northern Nevada featured much larger distribution buildings than Las Vegas, due to its central location within the 11 western states, which gave it an advantage as a distribution hub. Las Vegas, despite its population of well over 2,000,000, and 45 million visitors per year, was primarily a consumer market.
The Tahoe-Reno Industrial Center.
Historically, product was brought to Las Vegas, mainly to be consumed by the resorts and the local population, rather than to be stored or distributed to other areas. That has remained true until the end of the most recent recession. Today, the Las Vegas market rivals Reno in terms of the size of the average speculative building being constructed. In addition, its industrial base is 150% the size of the Reno area. Prior to the recession, Las Vegas was around 125% larger than Reno, although Reno still remains one of, if not the, highest per capita distribution markets in the country.
Having built across many parts of the Las Vegas valley, where do you see the economic hot spots that developers are flocking to or at least trying to get access to?
There is no question that West Henderson is undergoing a transformation. Companies across the board are choosing to join Kroger, FedEx, Amazon and the Raiders in the rapidly growing market. I expect that area to continue to grow and evolve rapidly.
"Buildings are not only much larger than before the recession, but they are also occupied by companies who, in previous years, may have chosen to locate in Southern California, Phoenix or Reno."
What are some of the key factors that you and your team are looking at within the Southern Nevada market as you consider new projects and the long-term development horizon for the company?
The Southern Nevada industrial market has seen a remarkable climb in both inventory and new companies, as well as companies expanding locally, since the ending of the Great Recession. Buildings are not only much larger than before the recession, but they are also occupied by companies who, in previous years, may have chosen to locate in Southern California, Phoenix or Reno.
Interstate 15 serves as the arterial route for distribution in and out of Las Vegas.
The state’s attractive business climate and relatively quick access to the population centers of California, Phoenix and Salt Lake City has made Las Vegas an attractive distribution market. This was traditionally focused on the convention market, where building occupiers were mainly servicing the resorts and convention businesses in the area. Today, that focus has shifted over to consumers. With that in mind, Panattoni has focused on land sites that provide quick access to Interstate 15 in order to allow our tenants to reach their customers quicker and more efficiently.
Do you see Panattoni focusing on office or other types of developments in the region in the near future?
No, we are primarily focused on industrial and some office development and given the trajectory of especially the industrial sector, we will continue our focus on that product.
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