The Las Vegas industrial market continues to evolve as developers and tenants alike look to make strategic decisions amid ongoing market uncertainty. Vacancy rates have risen as new supply has entered the market, yet not all property types are feeling the same pressure. Shallow-bay facilities, those under 50,000 square feet, remain in short supply, while big-box properties are facing the highest vacancies.
Leasing activity has increased in 2025, and net absorption continues to outperform the broader U.S. West region. However, tenants remain cautious, with many seeking smaller spaces to manage costs and maintain flexibility. This shift in market dynamics presents both challenges and opportunities for developers and tenants.
Why Las Vegas Remains Attractive
While the pace of new construction has slowed since the COVID-era boom, the region remains well-positioned to attract major industrial users. Fortune 500 companies that once prioritized key California markets are now turning to Southern Nevada for its strategic location, business-friendly environment, and reduced regulatory constraints. The key will be delivering facilities that meet evolving tenant expectations, both in terms of readiness, flexibility, and infrastructure.
The Rising Importance of Speculative Flexibility
In today’s tenant-driven market, speculative developments can be more strategic by implementing features that accelerate occupancy and appeal to a wide range of users, including those in manufacturing, food and beverage, pharmaceutical, and more.
Optimized site layouts, full lighting packages, and pre-designed office spaces can minimize retrofit needs and allow tenants to move in faster with fewer upgrades. Developers can also consider smaller initial footprints, redundant systems, and configurable layouts that adapt to multi-tenant use or future expansion.
ARCO can help clients strike the right balance of flexibility needed to adapt to tenant demands without overspending. By guiding decisions on incremental upgrades, infrastructure investments, and layout options, we help developers protect their budgets while enhancing their market position.
Addressing the Power Challenge
One of the most pressing issues in the industrial market today is power availability. Nearly all users, not just those in the manufacturing industry, now consider electrical capacity a critical site selection factor, and even smaller tenants may require substantial loads, with some facilities needing 4,000 amps for just 100,000 square feet of space.
While North Las Vegas and other jurisdictions are working to upgrade infrastructure, addressing power needs early in the design and construction process is essential to avoid costly delays. As a design-builder, ARCO engages early with utility providers, municipalities, and the project team to identify solutions. For speculative developments, incremental power upgrades built into initial construction can attract a wider range of tenants and reduce retrofit time.
Supporting Informed Decisions Amid Uncertainty
The design-build model offers clear advantages in today’s industrial environment. By integrating design and construction teams from the start, ARCO can provide real-time cost estimates, scheduling input, and layout guidance during preconstruction. This allows developers and tenants to understand not only the cost to build or retrofit but also the total cost of occupancy, including operational considerations, before making a financial commitment.
For tenants, this approach provides a clearer picture of how a space can function for their needs. ARCO’s experience across sectors means we can quickly assess feasibility, identify potential challenges, and propose practical, cost-effective solutions.
Positioning for What's Next
Las Vegas’ industrial sector has proven its resilience, and with the right strategies, it is poised to remain a top choice for both regional and national users. By embracing a design-build approach, developers and tenants can navigate uncertainty with confidence, creating facilities that are not only competitive today but also adaptable for the opportunities ahead.
ABOUT ARCO NATIONAL CONSTRUCTION
ARCO National Construction is a premier, full-service design-build general contractor with more than 30 years of experience providing clients with complete project delivery throughout the United States. As the nation’s largest builder of warehouse and distribution space, we pride ourselves in offering the best, most cost-effective, single-source, turnkey solutions and adding value to every project.
With 48 offices in major markets coast to coast, ARCO offers the strength and presence of a national general contractor with the focus, attention, and regional expertise of a local builder. ARCO’s proven design-build approach combines quality of design and construction, management of expense, and adherence to schedule into a single point of responsibility. ARCO offers preliminary design at no cost to our customers to remove the risk of substantial upfront costs.
