Southern Nevada has no control over the national economy, and the national economy will probably be the decisive factor in the valley’s economic growth prospects in 2026, according to Colliers research analyst John Stater.
Stater released his first quarter report breaking down the commercial real estate sectors and discussing the economy.
“If we begin to see improvements nationally, we think Southern Nevada will post moderate improvements locally,” Stater said.
It’s difficult to gauge the performance of Southern Nevada’s economy in the first quarter because so few economic statistics have been released past December, Stater said. Hospitality statistics were mostly down from one year ago, although occupancy, average daily room rates and revenue per room showed improvement. Home sales were also down compared to one year ago.
“Several causes have been suggested for Southern Nevada’s woes in regards to visitor volume, including reduced overseas travel, failure to capture the new young adult demographic and increased prices,” Stater said. “One must also consider personal concerns about debt, wage growth and inflation. To date, some efforts have been made by hospitality operators to improve the situation, and those efforts may be increased as both gaming revenue and hospitality taxable sales trended lower in 2026.”
INDUSTRIAL
Southern Nevada’s industrial inventory increased by 1.76 million square feet in the first quarter, expanding to more than 188 million square feet, Stater said.
Net absorption increased on a year-over-year basis to 1.54 million square feet, but was outpaced by new deliveries. Vacancy increased to 9.4 percent.
The weighted average asking rental rate increased from last quarter to $1.18 per square foot on a triple net basis.
Sales volume in owner/user sales decreased this quarter, while investment sales volume improved significantly, Stater said.
“Southern Nevada’s industrial market has been fighting two battles over the last few years,” Stater said. “The first was a decrease in demand, with much of that decrease coming from the national and regional companies that exploded into Southern Nevada during the post-2020 e-commerce boom. That boom brought industrial vacancy down to 1.3 percent in 2022. The boom also stimulated development, especially of bulk warehouse buildings.”
Unfortunately, as development peaked in the fourth quarter of 2023, with over 17 million square feet of industrial product under construction, demand was already failing to keep pace, Stater said. This resulted in increasing vacancy rates, peaking at 10.1 percent in the third quarter of 2025. In response to market conditions, developers slowed development.
“Southern Nevada had only 1.7 million square feet under construction this quarter,” Stater said. “Interest in Southern Nevada by national and regional companies improved over the past two quarters, and net absorption trended upward over the past four quarters. We think this improvement will continue through 2026, provided the national economy cooperates.”
OFFICE
Southern Nevada’s office inventory decreased by 54,046 square feet in the first quarter of 2026 due to the conversion of two Henderson office buildings to retail use and minimal office completions. This brought total inventory to 46.1 million square feet, Stater said.
Net absorption was negative 50,225 square feet in the first quarter, an improvement over one year ago when net absorption was negative 122,965 square feet. The overall office vacancy rate increased to 11.9 percent.
The weighted average asking rental rate decreased slightly to $2.63 per square foot on a full service gross basis. It was $0.02 lower than one year ago.
Sales volume in the first quarter in both owner/user and investment sales decreased on a quarterly basis, but improved compared to one year ago, Stater said.
Southern Nevada’s office market had a strong fourth quarter in 2025, and was generally less volatile in 2025 than in 2024, Stater said.
That strength was not carried into the first quarter of 2026, Stater said. “Net absorption moved back into negative territory, vacancy increased and asking rental rates decreased.
While overall inventory increased by 869,365 square feet since 2021, several projects have been removed from inventory due to conversion to government or retail use over that period. The removal of less desirable office space should mean higher occupancy for those projects that remain, Stater said.
Vacancy has remained high in east Las Vegas due to the age and less-desirable location of that submarket. East Flamingo Road was a highly desired location for office users until business owners migrated to Green Valley/Henderson, Summerlin and the southwest, Stater said.
“Southern Nevada’s office market faces numerous headwinds in 2026, from the impact of A.I. on office work to a general lack of economic growth,” Stater said.
“The office market is currently stable, but it is not growing. We think that moderate improvements in vacancy and asking rental rates are possible in 2026 if the national economy avoids recession.”
RETAIL
Southern Nevada’s retail inventory expanded by 89,590 square feet in the first quarter, bringing total retail inventory up to 70.7 million square feet.
Net absorption was 234,724 square feet in the first quarter, surpassing total net absorption for the year of 2025. The overall retail vacancy rate decreased to 4.3 percent in the first quarter, Stater said.
The weighted average asking rental rate increased to $1.96 per square foot on a triple-net basis, $0.06 per square feet higher than one quarter ago and $0.18 per square foot higher than one year ago.
Sales volume in single-tenant investment sales decreased slightly from the fourth quarter of 2025, while shopping center investment sales volume increased, Stater said.
“Southern Nevada’s retail market has shown remarkable stability over the past three years, with vacancy ranging between 4.3 percent and 4.6 percent,” Stater said. “This was despite relatively low job growth, decreasing retail taxable sales and continued competition from e-commerce.
“While the market has been resilient, it was stronger from 2021 to 2022, and performance in 2025 did not suggest a revival of that level growth in the near future,” Stater said. “The first quarter of 2026 suggests that Southern Nevada’s retail market is moving from recovery to growth, even if that growth is not as strong as seen in 2021 and 2022.”
