Market Reports

By Ryan Sarbinoff, First Vice President and Regional Manager, Marcus & Millichap A growing, educated local labor force and lower rents compared to other office hubs in the region are driving office tenants to Las Vegas. The metro registered the largest drop in office vacancy among major U.S. markets over the 12-month span that ended in March, as tenants absorbed more than 2 million square feet. Much of this space was at Class B/C properties, with the subsector noting the strongest four-quarter span for demand on record. The resulting 330-basis-point reduction in overall availability during the year-long period slashed vacancy to a more than 15-year low of 12.4 percent, enhancing the sector’s outlook heading into the second quarter.  The metro’s second-largest submarket by inventory, Southwest Las Vegas, exemplifies the strength of the local office sector. During the past year, the area accounted for half of the metro’s 20,000-square-foot-plus lease executions. International Gaming Technology’s sublease of a three-story building highlighted recent activity, with VisCap Media, Agilysys, DraftKings, Kiewit and Molina Healthcare all making notable commitments that dropped vacancy to 9.4 percent in March.  Apart from leasing, this submarket is also the center of development. Roughly 60 percent of the space slated for completion …

By Patrick Riggs, Senior Advisor, Office, Dickson Commercial Group The leasing market in Reno/Sparks is back on track following a strong end to 2021. The fourth quarter of 2021 concluded with an impressive 145,558 square feet of positive net absorption. This was the third straight quarter of positive net growth. Panasonic Energy stole the headlines in the quarter four with its 95,000-square-foot lease of 645 E. Plumb Lane in Reno’s central submarket. However, demand in the smaller office spaces under 5,000 square feet continues to be the driving force in this rebound. Local and regional companies with more flexibility to maneuver the pandemic were rewarded in 2020 and 2021 by capitalizing on aggressive landlord concessions. We are starting to see these concessions being rolled back as demand continues and vacancy nears pre-pandemic levels. The 2021 Reno sales market bounced back from 2020 with increases across the board in overall volume, price per square foot and number of sales. Both volume and the number of sales nearly doubled year over year. Average sales pricing is coming in at $300 per square foot, while new build-to-suit construction is over $400 per square foot with no slowdown in sight.  Owner-users and office investors have been …

By Wes Drown, Broker Associate, REMAX Commercial The Las Vegas Valley continues to see growth in the demand, velocity, rates and a decline in incentives as Vegas bounces back. This is led by the return of our entertainment industries, which are almost to pre-COVID levels, in addition to the massive demand for housing and commercial construction. All you have to do is take a drive around the 215-Beltway to see that activity is everywhere.  The news-grabbing projects that are seemingly announced weekly are once again turning heads. They’re attracting young college graduates and stimulating the needs for goods and services, almost to a pre-COVID level.  Office construction is underway in earnest, with expansion in Summerlin, the SW “Curve” and West Henderson. High- and mid-rise office with parking structures are being leased up in the Westside areas, with predominantly single-story popping up in Henderson. Rates for suburban office products are pushing over $2.10 per square foot, per month, including operating costs. The spread between asking price and closed deals is shrinking significantly. Incentives are back to “normal” with landlords offering new carpet and paint, or maybe a partial month early occupancy rather than the free rent or step-up rents we’ve seen in the past. …