Monday, March 29, 2010

Reno/Sparks Market Conditions vs. National Market Conditions

Posted by: Paul Perkins, CCIM, SIOR
Senior Vice President
Industrial Properties Group

A graduate of California State University, Northridge, Paul has more than 40 years of experience as a real estate broker. He relocated to Reno in 1978, and since 1986 has specialized in the leasing and sale of industrial properties. In May of 2005, Paul joined 26 of his former Colliers colleagues in founding Alliance Commercial Real Estate Services.

Whenever I see articles about national or global conditions in real estate, I take them with a grain of salt. Why? Because real estate, whether it is residential, industrial, office, retail or whatever, is a LOCAL market. Conditions in one market may be totally different than others, and if you're in that particular market the national statistics don't amount to a hill of beans when it comes to describing YOUR market's condition.

For instance, in the subject article comments like "There was less overbuilding in the industrial sector" made me chuckle. The Reno/Sparks market saw a you-know-what load of overbuilding during 2005-2007, particularly from developers new to the area using OPM. Some of us ruminated about the consequences of this unbridled construction in the face of historic absorption, but we're just brokers...what did we know. The resulting 15.5%+ vacancy rate that resulted is the highest ever recorded and devastated industrial construction; the Associated General Contractors named the Reno/Sparks area the hardest hit in the nation.

The article does reference individual markets...Houston, Dallas and Los Angeles to name a few, but these are primary markets and, although they may represent a portent of things to come, they have totally different dynamics than Reno/Sparks. Nonetheless, although the article doesn't reflect conditions here, we can hope it is a portent of a brightening global picture, which eventually will filter down to our little corner of the world."


Marie said...

Great point! It amazes me when people make blanket statements about real estate properties when investment and value vary so differently, even from nearby zipcode to zipcode.

NAI Alliance said...

Thanks Marie. Glad to know I'm not the only one who made this observation. pp