Market Reports

— By Dan Palmeri, Senior Vice President, CBRE — As Las Vegas reinvents itself as the sports and entertainment capital of the world — while still maintaining the fun factor it has always been known for — the corporate world continues to look at Southern Nevada as a legitimate place to do business. The city saw a record number of Class A deliveries in 2022 and has shown no signs of slowing down through 2023. This is a reflection of the demand for new, functional and relevant office space.  Like most markets, location and quality of buildings are the main drivers for employers as they focus on employee happiness and retention. As Las Vegas has grown from a small desert town in the ‘70s and ‘80s with 505,000 residents in 1983, to a market of more than 2.3 million residents today, the natural geographical growth outward has hit a point where the city has reached the Valley’s boundaries in all directions. What was once a five- to 10-minute commute to the center of town has now become a 20- to 30-minute commute for the mass of suburban dwellers. This has organically led to a focus on a 25-mile stretch from …

— By Melissa Molyneaux, Executive Vice President, Colliers — The Northern Nevada market has seen continued positive net absorption, slowed investment sales and a sizeable increase in available sublease space in recent months.  Local tenants with smaller footprints have been the driving force behind leasing activity and the market’s positive net absorption, with most new leases signed in 2022 being 5,000 square feet and less. Meanwhile, national and corporate tenants reevaluating their space needs have brought much of the available sublease space to the market in significantly larger blocks.  Uncertainty surrounding interest rates has slowed investment sales, although pricing remains healthy. With investors putting a pause on new acquisitions, owner-user purchase activity may increase as tenants seize new occupancy opportunities.  New construction starts have been minimal, although redevelopment/renovation projects remain prevalent. Two new developments that have broken ground include the Kimpton, a premier Class A high rise in downtown Reno, and Renown South Meadows, a specialty care center with about 40,000 square feet available for third-party providers. Each development represents continued demand from client-facing occupiers and healthcare providers in the region.  In 2022, there were 30 companies that either expanded in or relocated to Northern Nevada, according to the Economic Development Authority of Western …

By Patti Dillon, SIOR, Senior Vice President, Colliers While the key measures of the Southern Nevada economy have improved since the COVID lockdowns, some have improved more than others. The future of the office market is strong, but it will be weighted toward newer Class A mixed-use office assets. Employers are feeling the pressure to attract and retain the best talent in a tight labor market. There are plenty of vacant positions. However, available and willing workers are still scarce, which is driving the need for office locations of employers to be more inviting. According to DETR, Southern Nevada’s office job market added 24,000 jobs between May 2021 and May 2022. Unemployment in the Las Vegas-Paradise MSA was 5.2 percent in May 2022. Over the past 12 months, total employment in Southern Nevada increased by 87,100 jobs, a 3 percent increase. After experiencing a significant expansion last quarter, Southern Nevada’s office market cooled at midyear. Net absorption remained positive, at 45,443 square feet, but did not keep pace with the 129,272 square feet of new development. This lifted vacancy to 12.7 percent this quarter from 12.5 percent one quarter ago. Asking rental rates increased to $2.37 per square foot on a full-service …