— By Giovanna Abraham, Market Intelligence Analyst, Avison Young —
The Las Vegas office market continues to defy broader national trends, maintaining resilience and attracting attention for its stability and growth. While many U.S. cities struggle with rising office vacancies, Las Vegas stands out for its comparatively low vacancy rate, steady rent growth and positive return-to-office trends.
Despite recent increases in vacancy, Las Vegas remains well below national averages, with a vacancy rate of 15.2 percent in the third quarter — 850 basis points lower than the national availability rate of 23.7 percent. This performance reflects the unique dynamics shaping the Las Vegas office market, including a steadily growing population and the city’s appeal as a business-friendly destination.
Low Vacancy Rates and a Stable Market
Office vacancy has gradually increased over the past six quarters, but Las Vegas has also experienced a much slower rise than many larger metropolitan markets. This measured growth has allowed the city to remain competitive, with vacancies rebounding to pre-pandemic levels by late 2021 and holding steady through first-quarter 2023. After brief upticks in the first half of 2024, the vacancy rate declined again by third-quarter 2024, dropping from 15.9 percent to 15.2 percent. This resilience is a testament to the demand for Las Vegas office space.
Rising Office Rents in High-Demand Areas
Las Vegas has experienced a steady climb in office rents. Direct asking rates reached a high of $30.47 per square foot in 2024, marking a 5 percent increase over 2023. Since 2016, rents have increased by an average of 4.6 percent annually, translating to roughly $1.02 per year in gains. Much of this growth is driven by the limited availability of new office buildings and high demand for modern, suburban office spaces.
The Summerlin and Southwest submarkets lead the Valley in rental rates. Meanwhile, North Las Vegas – known for its industrial focus – offers rents below $25 per square foot. It has, however, witnessed a gradual increase. Rental prices in this area are expected to rise further as demand continues to outpace supply and no new office developments are projected in the Southwest over the next two years.
Positive Return-to-Work Trends
Las Vegas has also outperformed many other U.S. cities in return-to-office metrics. Avison Young’s Office Busyness Index notes Las Vegas office visitation reached 77 percent of its pre-pandemic level by the third quarter. This is significantly above the national average of 60.4 percent. Contributing factors include a growing local economy, increased business activity and the appeal of Las Vegas as a desirable workplace as companies adopt hybrid work models that encourage office attendance while maintaining flexibility.
Future Outlook
Las Vegas remains an appealing choice for the office sector as companies continue to invest in locations that support hybrid work while attracting in-office attendance. Limited new construction in certain high-demand areas, such as the Southwest submarket, could drive further rent increases. The city’s appeal as a growing business hub and a desirable workplace destination, combined with a stable and competitive vacancy rate, suggests a strong outlook.
This article was originally published in the November 2024 issue of Western Real Estate Business.