Las Vegas Office Market Turns to Downtown for Opportunities
The overall Las Vegas office market has seen steady positive absorption since 2012. Vacancy rates peaked in 2012 and have been declining year over year. The market vacancy rate is 11.7 percent, as of the third quarter. Occupiers are looking at higher-density options with outdoor collaborative areas and walkable amenities. There are projects planned in several submarkets that can accommodate these requirements, however, with those submarkets tightening, these new projects will be at the upper-end spectrum for rental rates.
As Las Vegas has grown and continues to sprawl out, office users have moved to the suburbs to live and work within closer proximity to one another. This has made it increasingly difficult to find larger blocks of available space in the more popular suburban submarkets, thereby causing occupiers to look at other mature submarkets, including Downtown.
Downtown serves as Las Vegas’ Central Business District for government, law and civic uses. At one point, it was home to Nevada’s oldest law firm. Downtown is evolving and, in true Vegas fashion, re-inventing itself. The city designed an Innovation District in the Downtown core with an emphasis on emerging technology in the areas of public safety, mobility and environmentally conscious solutions for the future. The city is also implementing a technology initiative in the Downtown area, starting with the opening of the International Innovation Center Vegas inside Bank of America Plaza. Bank of America Plaza is the premier Class A building in Downtown and sits in the heart of the Innovation District. The 11,000-square-foot facility is an incubator space for the development of new and emerging technologies. Several companies have relocated to Downtown, including Terbine, Ubicquia, Dyntek, SonicWall and a division of NTT Data Corp. Having access to an international airport, favorable business climate, affordable cost of living and universities for future employment opportunities makes the City of Las Vegas a very appealing option for technology companies.
The bright lights that have long drawn visitors to Las Vegas now light the way to the city’s technology-based future.
— By Jayne Cayton, senior director, Cushman & Wakefield. This article first appeared in the December 2019 issue of Western Real Estate Business magazine.